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Real leaders must be ready to sacrifice all for the freedom of their people.
- Nelson Mandela
A document by the
Organisation Undoing Tax Abuse (OUTA)
No room to hide: A President caught in the act A document by the
28 June 2017 Organisation Undoing Tax Abuse (OUTA)
Foreword
Over the past few years, various formal attempts have been made to remove Jacob
Zuma from his position as the President of South Africa, through Parliamentary
OUTA believes that significant and sufficient input has been provided on President
recent Public Protectors reports on Nkandla and State Capture - to warrant his
removal. President Zumas supporters on the other hand, have often claimed
insufficient evidence against him at the time when Members of Parliament or the
authority are expected to act in the interests of the people, it takes just one of the
sitting president from power. For some unexplained reason, the removal of President
Zuma requires far more compelling evidence to convince those in authority to act in
the interests of the country. This document provides the links and detail in a range
While that the evidence stacked against President Zuma has been substantive and
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could piece together the facts and evidence in a manner that placed beyond doubt,
the veracity of the claims against him. This document was developed in the format
Furthermore, OUTA took advice that instead of turning in haste to the courts, we
should present our case document to Parliament, with a view to requesting the same
to be tabled for discussion with the House of Assembly. In doing so, we believe all
ballot or not.
Our case document shows that President Zuma has without doubt:
positions (and retained them when he had ample reason and opportunity to
remove them);
Mismanaged his Cabinet in a manner that has had a detrimental effect on the
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Willfully and maliciously lied or misled Parliament and the nation; and
Abused his position to enrich himself, his family, his friends and his cronies.
The building of this case document has taken several months, with a team of
Well into OUTAs project and case building process, two reports surfaced in May
2017 that added to the sordid picture of state capture, these being:-
The first was a report on a probe by the South African Council of Churches
Then came the gripping saga of the Gutpa E-Mail Leaks at the end of May 2017,
which has continued unabated throughout June. The facts and documents from
these E-Mail Leaks, have no doubt provided significant support and strength to the
claims presented in our case document and we thus recognize and thank the
investigation teams at AmaBungane, Scorpio and the Times Media, who have
trawled through the content of thousands of documents and e-mails obtained from a
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The format of the narration within our case document, has been carefully laid out in
several chapters to provide a solid basis for informed decision making by those in
authority to act with clear conscience. Indeed, it paints the picture of a President who
June 2017, OUTA will ensure that all MPs will receive the same, preferably through
OUTA will also present this case document to other relevant institutions and people
in authority, such as the African National Congresss NEC, the Hawks, the Minister
As the case document has also been prepared and compiled in a manner that
makes it suitable for presentation in a court of law, OUTA will contemplate turning to
Removing President Zuma from power is the primary step that needs to be taken,
before South Africa can start the journey and period of redressing the debilitating
effects that his conduct and the situation of state capture has had on our country.
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A Judicial Commission of Inquiry into State Capture doesnt halt our action.
While we welcome the undertaking from the President to signal the formation of a
Judicial Commission of inquiry into state capture, we trust that this decision will not
Commissions of inquiry are known take years to unfold and the extent of our current
problems and plundering of the states coffers does not allow South Africa the luxury
OUTA thus believes that while a full and credible judicial commission of inquiry
should be encouraged, this should not preclude all other attempts to remove
individuals and businesses, whose main aim is to hold government accountable for
the abuse of power, corruption and maladministration. In doing our work, we ensure
that more tax revenues are made available to the benefit all in South Africa,
To date, we have conducted several successful actions and interventions that have
saved South Africa from unnecessary and wasteful expenditure, whilst holding those
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responsible to account for their actions. We believe that our work, combined with
that of many others within civil society to remove the State President from power,
We submit this document with the trust and hope that those in authority will reflect
thereon and commit to a future in which leadership is held accountable for their
actions. We do so in the belief that the evidence herein is substantive and strong
Presidents transgressions and furthermore, with the intention of taking this matter as
We look forward to working with those who take this matter seriously.
Wayne Duvenage
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Contents
CHAPTER 1: INTRODUCTION ....................................................................................................... 11
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.............................................................................................................................................................. 91
Mr Zwane used his position as MEC to facilitate the landing of the Guptas wedding guests
Mr Zwane has used his position as Minister to benefit the Guptas and Duduzane Zuma 114
Mr Zwane appoints Gupta associates as his advisors, despite conflicts of interest .......... 120
Minster Zwane takes instruction from Gupta associates on official public statement ....... 123
Minister Zwane abused his position on the Inter-Ministerial Committee ............................. 125
............................................................................................................................................................ 127
The Ministers appointment of Hlaudi Motsoeneng as COO of the SABC .......................... 140
Muthambi proposed to appoint an ICASA chair to favour the Gupta-Zuma media company,
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CHAPTER 1: INTRODUCTION
1 In its Nkandla judgment, the Constitutional Court reminded the nation and its
decisive break from the unchecked abuse of State power and resources
this goal, we adopted accountability, the rule of law and the supremacy
2 This report is a sad testament to how far removed from this Constitutional vision
we have been led by President Zuma. President Zuma and his Cabinet have
allowed and enabled rampant abuse of State Power and Resources, for the
benefit of the President, his family, their associates in the Gupta family2 and
others. In the process President Zuma and his associates have been responsible
to Parliament about his misconduct, and his government, has with impunity
3 This report has been prepared to assist Parliament to exercise its Constitutional
1 Economic Freedom Fighters v Speaker of the National Assembly and Others; Democratic Alliance v Speaker of
the National Assembly and Others (CCT 143/15; CCT 171/15) [2016] ZACC 11; 2016 (5) BCLR 618 (CC); 2016
(3) SA 580 (CC) (31 March 2016) (Nkandla judgment) at para 1, with reference to sections 1(c) and (d) of the
Constitution.
2 Gupta Family includes Messrs Atul, Ajay and Rajesh Gupta
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President Zuma and his Cabinet concerns facts that are in the public domain.
We do not deal with those facts in the main body of this report because they
concern matters of public knowledge. The main body of the report details facts
that have recently emerged from the Gupta emails leaked from the Sahara
Computers server and that have not previously been assembled in one place.
4 The disclosures from the Gupta emails justify the removal of President Zuma
documented Constitutional violations, they make the case for the removal of
violations of President Zuma and his Government before outlining the facts
flowing from the Gupta emails that are addressed in the main body of the report.
6 President Zuma came to power with the cloud of hundreds of corruption charges
hanging over his head. These charges related to his corrupt relationship with
to avoid any trial on the corruption charges brought against him and has
unconstitutionally abused his powers over the Criminal Justice System to protect
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8.1.1 The unlawful removal of Mr Pikoli from the Office of the National
NDPP;4
8.1.3 The acting appointment of Ms Jiba to the Office of NDPP when she
8.1.4 The attempt to buy Mr Nxasana out of his Office as NDPP by paying
3 Pikoli v President of the Republic of South Africa and Others 2010 (1) SA 400 (GNP)
4 Democratic Alliance v President of the Republic of South Africa and Others 2013 (1) SA 248 (CC)
5 General Council of The Bar of South Africa v Jiba and Others 2017 (1) SACR 47 (GNP)
6
The precise circumstances of Mr Nxasanas departure from office are the subject of pending litigation. It is
undisputed that the President concluded an agreement with Mr Nxasana in terms of which he recognised that Mr
Nxasana was a fit and proper person to hold office as NDPP but paid Mr Nxasana R17.3 million in a settlement
agreement that provided for his departure from the office. A copy of the relevant agreement is Annexure INT 1.
Mr Nxasana states that he did not want to leave office but was pressurized by the President to do so. He links
this pressure to the Presidents mistaken belief that Mr Nxasana had been meeting with Bulelani Ngcuka, the
former NDPP who had instituted charges against Mr Zuma. Copies of the affidavits of Mr Nxasana and the
President in this regard are attached INT 2 and INT 3.
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8.2.2 The unlawful removal of General Dramat from his position as head
of the Hawks;8
9 While President Zuma and his government have pre-occupied themselves with
attempts to ensure that he is not prosecuted, the Criminal Justice System has
dramatically.
10 The Nkandla debacle is notorious. While millions of South Africans live in abject
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11 When the Public Protector investigated the matter she concluded that the
President had violated the Executive Members' Ethics Act and the Executive
Ethics Code. As Remedial Action she ordered the President to pay back the
Ministers for their handling of the Nkandla project and to report to Parliament on
12 The President simply ignored the Remedial Action handed down by the Public
Misleading Parliament
13 The Nkandla affair also showed the capacity of the President to mislead
By the time government came, the contractors were on site that had been
wanted to improve the fence, etc. I told government that I had my own plan
happened was that I allowed government to meet with the contractors who
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Works first met with the private contractors. The statement created the
impression that the publicly funded upgrades still had to be arranged around a
private construction project. The true facts were that the Department of Public
Works were meeting with President Zuma and his architect Mr Minehle before
14.1 There was a meeting on site with the Department of Public Works and the
14.2 There was another meeting with the Department of Public Works on 20
construction project.
14.3 Construction on these three private dwellings commenced only after that
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15 President Zuma also stated that My residence Nkandla has been paid for by the
Zuma family. All the buildings and every room we use in that residence was built
his Nkandla residence. This was patently false, as government fitted the bill for
the building of the visitors centre, an amphitheatre, a cattle kraal, a chicken run
and the swimming pool all at President Zumas private Nkandla residence and
misleading statements in this regard led to the absurd spectacle of public officials
16 President Zuma also misled Parliament in relation to the Public Protectors State
of Capture report.
16.1 During October 2016, the President attempted to interdict the Public
14http://constitutionallyspeaking.co.za/full-transcript-of-parliamentary-exchange-with-president-zuma-on-nkandla-
scandal/
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16.3 This was untrue. A few days after this, the erstwhile Public Protector
released recordings of her interview with President Zuma and his attorney.
17 The social grants debacle is possibly even more disturbing than the Nkandla
African Social Security Agency (SASSA) put at risk the payment of social grants
mechanism during the three year period in which the Constitutional Courts
18 When the Black Sash approached the Constitutional Court earlier this year to
ensure the continued payment of social grants and to ensure court oversight over
15 The transcript of this recording can be located from the following website:
http://www.pprotect.org/library/investigation_report/2016-
17/Annexure_A1_Interview_between_President_Zuma%20_and_the%20Public_Protector.pdf
16
Black Sash Trust v Minister of Social Development and Others (Freedom Under Law NPC Intervening)
(CCT48/17) [2017] ZACC 8; 2017 (5) BCLR 543 (CC); 2017 (3) SA 335 (CC) (17 March 2017) (Black Sash Trust
v Minister of Social Development) at para 15
17See Allpay Consolidated Investment Holdings (Pty) Ltd v CEO, SA Social Security Agency 2014 (4) SA 179
(CC)
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a proposed new contract between SASSA and CPS, the Constitutional Court
This Court and the country as a whole are now confronted with a
able to fulfil its constitutional and statutory obligations to provide for the
social assistance of its people. And, in the deepest and most shaming of
19 Affidavits subsequently filed by the current and former CEOs of SASSA reveal
responsible for this state of affairs. She had taken charge of the project to put in
place a new grant delivery mechanism, appointed work streams responsible for
this project and directed that they should report to her, not to SASSA. 19
Furthermore, she had misled the Court by failing to disclose these facts and
leaving the blame to be carried by the SASSA executives from whom she had
grant payments, Minister Dlamini had to be held accountable for what was
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since the advent of democracy. Inexplicably, President Zuma not only retained
her in his Cabinet in the reshuffle of 30 March 2017 but left her in charge of the
21 The facts set out above are all in the public domain. What has not been in the
public domain until recently are the documents leaked from the Sahara
in relation to the vote of no confidence. They show how the Gupta family has
managed, with the assistance of the President, to control state resources and
state power for their private benefit. This report is designed to present
Parliament with the facts in relation to these documents in a readily available and
accessible form.
22 In Chapter 2 we describe the links between President Zuma and the Gupta
family.
22.1 We show that the Gupta family has been cultivating close relations with
President Zuma from the point at which he was elected President of the
22.2 We describe the reciprocal manner in which the Gupta family has looked
after the financial interests of President Zumas family and how President
Zuma, in turn, has protected the Gupta familys business interests and
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23 In the remaining chapters, we describe how this process has played out in
relation to the four Government Departments that are of most significance to the
Gupta family:
23.1 The Department of Public Enterprises which exercises control over the
23.2 The Department of Mineral Resources, which exercises authority over the
23.4 The Ministry of Finance that has attempted to protect State resources from
24 Chapter 3 describes how President Zuma, and his appointed Ministers for Public
Enterprises, Malusi Gigaba and Lynne Brown, have overseen the plundering of
by SoEs to the benefit of companies owned and controlled by the Gupta family,
President Zumas son Duduzane Zuma and their business associates. These
contracts include:
24.1 Transnets unlawful award of a R50 billion tender for freight locomotives
Ltd earned more than R5.2 billion in a 21% service fee from the
and a five-year network service contract worth R1.8 billion in 2014 and
24.4 Eskoms conclusion of a R43 million contract with the Guptas media
Transnet and Denel concluded similar contracts with TNA Media for
millions of rands.
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Denel.
budgets of SoEs has been more recently been secured by President Zumas
26.1 Long before Mr Seleke had any formal role in the Department of Public
Zuma after first being vetted by members of the Gupta family, and without
27.2 Minister Zwane has a longstanding improper relationship with the Gupta
family going back to his days as MEC for Agriculture in the Free State
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meetings with Tony Gupta. Minister Zwane was also flown to Dubai, and
facilitate the sale of Optimum Coal Mine from Glencore to the Gupta-linked
27.5 While the dispute over Optimum Coal was taking place, and Eskom was
Optimum Coal Mines R1.43 billion rehabilitation trust fund into Bank of
Baroda accounts, without ensuring that these funds were properly ring-
public and media statements by Gupta family members and known Gupta
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Howa, Duduzane Zuma and the Gupta-hired public relations firm, Bell
Pottinger.
judicial inquiry would investigate why South Africas banks had blacklisted
27.9 Despite the fact that Minister Zwane had publicly misrepresented what
Zuma and remains responsible for the Mineral Resources Portfolio that is
28 In Chapter 5 we consider the role of another Minister who has been captured
show that:
28.1 During the course of July and August 2014 (shortly following her
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Authority of South Africa (ICASA) on condition that she grant the Guptas
28.4 In May 2016, Minister Muthambi attended meetings that the Inter-
Ministerial Committee held with banks on the closure of the Guptas bank
committee.
Mzwanele Manyi as her legal and special advisors. Both have close ties
to the Guptas.
29 We note that Minister Muthambi has been subject to strident criticism by the
Minister. Nevertheless, she has been retained in the Cabinet by President Zuma.
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30.1 We describe the offer made by the Gupta family and Duduzane Zuma for
30.3 We show the clear influence that the Gupta family exercised in relation to
the brief appointment of Mr van Rooyen as Finance Minister and how the
through Mr Seleke.
the sustained conflict between Minister Gordhan and the Gupta family
30.5 We conclude that the inference is inescapable that the interests of the
Gordhan.
31 In the final chapter, we set out the legal principles that the Constitutional Court
has held to be applicable to the National Assembly and its members when they
principles, the National Assembly and its members would be failing in their
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Constitutional duty if they voted to allow President Zuma and his Cabinet to
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one must consider the links between the Zuma family and the Gupta family. In
this chapter, we explore the close relationship between President Zuma, his
2 The exact date on which President Zuma befriended the Gupta family is unclear.
follows:
3 The advertisement makes clear that the Gupta family have a long-standing
relationship with President Zuma spanning seventeen years. In their own words,
stronger than the relationship that the Gupta family had with his predecessor,
23 News24. (2017). Guptas: We were friends with Zuma before he was president. [online] Available at:
http://www.news24.com/SouthAfrica/News/guptas-we-were-friends-with-zuma-before-he-was-president-
20160318.
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friendships with whomever has held positions of power in the Government or the
ANC. The invitation lists to their family weddings and family parties reads like a
Whos Who of ruling party politics.24 The reason for this is obvious the Gupta
family look to cultivate close relationships with all holders of political power who
4 The President is obviously permitted to have friends. The issue is the Presidents
utilisation of the power and influence attached to his position to benefit those
friends, and through them, himself or members of his family. The President came
to power under the cloud of pending corruption charges relating to his friendship
with Schabir Shaik while he held office in the KwaZulu Natal provincial
government. His friendship with the Gupta family has been far more damaging
5 A search for direct links and correspondence between the President and the
Gupta family would be both nave and futile. The malfeasance committed by
5.1 During 2009, Mr Jacinto Rocha was employed as the Deputy Director-
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5.2 Shortly after President Zumas first inauguration in 2009, Rocha was
5.3 The meeting was also attended by President Zuma, Rajesh Tony Gupta,
Rocha to his son, Duduzane Zuma. The Sunday Times quotes Mr Rocha
5.4 Mr Rochas involvement with the Gupta family since then is notorious. In
was the official who awarded Imperial Crown Trading 231 (Pty) Ltd (ICT)
prospecting rights over the iron ore resource in respect of the Sishen Mine.
ICT was a company with no track record in mining but it was 50% owned
shareholder. The iron ore resource to which Mr Rocha gave ICT exclusive
rights was one valued at more than R1 billion. Mr Rochas awarded the
within six months of his meeting with President Zuma, Duduzane Zuma
5.5 According to Mr Rocha, Duduzane Zuma and Tony Gupta later recruited
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6.1 First, that the President improperly used his influence to provide undue
assistance to the Guptas from the beginning of his first term in office;
6.2 Second, that State patronage of the Gupta family is directly linked to the
6.3 Third, that the business interests of Duduzane Zuma are particularly
6.4 Fourth, that Duduzane Zuma and the Gupta family know about cabinet
power to place advisors of their choice with Cabinet Members in the hope
7 In relation to the latter, there is mounting evidence that the Gupta family has the
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Public Enterprises Parliaments oversight body into, inter alia, South Africas
[7] I have been a member of the African National Congress since the
was surprised and had never met Mr Gupta before. Mr Gupta informed
introduced me to the senior Gupta brother. When I left the Sahara office, I
was still under impression that I was being taken to Pretoria in order to
meet with the President. However, I was taken to the Guptas residence in
28 President of the Republic of South Africa v Office of the Public Protector and Another, case no.: 79808/16.
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[12] My impression was that the members of the Gupta family whom I met
They were after all brazen enough to offer me the position of Minister of
Public Enterprises.
[13] I declined the offer and told the Gupta representatives that they lacked
entered the room. I recounted the offer and advised him that I could not,
in good conscience, accept the offer. The President responded and said
Its okay ntombazana, you have come such a long way in crutches and
saw me out.
Zuma at the Gupta household when the improper offer was made to her. It thus
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demonstrates that President Zuma (i) knew that the Gupta family members were
10 Mcebisi Jonas, the former Deputy Minister of Finance, reported a similar incident,
Jonas was invited to a meeting with Duduzane Zuma. Duduzane Zuma moved
the meeting to the Gupta Household in Saxonwold. There, Mr Jonas met with
Ajay Gupta and Mr Fana Hlongwane. Ajay Gupta offered Mr Jonas R600 000.00
Nhlanhla Nene.
11 The Guptas also have ready access to the President when they require his
intervention on their behalf. By way of illustration, emails from the Sahara Server
also show that during 2015, an employee at Oakbay arranged for a private
aviation company to meet with the President at short notice so that arrangements
could be made to spare the Guptas the inconvenience of having to depart South
11.1 Duduzane Zuma, Shanice Zuma and members of the Gupta family
11.2 They were using the services of Fireblade Aviation and did not want to
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11.3 The Gupta family procured the intervention of the President to change this
12 President Zuma has also surrounded himself with advisors who have close
Presidency. She has worked for President Zuma since 2000 and has been
12.2 Prior to taking up her position in the Presidency, and while she was an
employee of the ANC at Luthuli House, Ms Kaunda had drawn R20 000
12.3 Emails show that between November 2012 and January 2013, Ms Kaunda
attended four meetings at the Gupta household a fact which she admits.
30 Annexure ZGF 5.
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wrote: Document for Mr T [Tony Gupta]. We will use this vehicle. He has
Ms Kaunda said:
with them. 32
12.4 Ms Kaunda says she did not take further part in the business. Yet, her
version is inherently suspicious. When she sent her email to Tony Gupta
family, she had two days previously resigned her membership in the CC
Tony Gupta, provided for the transfer of six ordinary shares in Dixie
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largesse but took care to ensure that the interest in NtombNkulu would be
held by her son, not her, by the time that it was issued shares by the
Guptas.
13 The closeness of the relationship between President Zuma and the Gupta family
is reflected in the fact that Tony Gupta was involved in drafting a letter, in
UAE, requesting assistance with proposed residency status in the UAE.36 The
letter was sent from Mr Ashok Narayan to Tony Gupta under cover of an email
dated 20 January 2016 which stated Sir ji, revised letter.37 The file name of the
14 The letter itself states the following above the signature line of President Zuma:
I fondly remember our meeting in the UAE and the gracious hospitality
I am happy to inform you that my family has decided to make the UAE,
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residence located at Emirates Hills, Dubai (Villa No. L-35, Lailak Street
security issues since my son and the family will be travelling quite
Mr. Duduzane Zuma to meet with you and formally introduce the family to
you.
15 The President denies any knowledge of this letter. If that were the case one
the Gupta family in drafting a letter in his name to another head of state, and to
have taken steps against Tony Gupta. However, nothing of the sort has
happened.
16 This is not the first time that the President has been content to suffer
embarrassment through the use of his name in matters relating to the Guptas.
use of the Waterkloof Airbase as a landing strip for guests coming from India to
a Gupta family wedding. For present purposes we point out that Mr Vusi Bruce
at Waterkloof to allow the Gupta aeroplane to land there by claiming that he was
under pressure from President Zuma to do so. Again, if Mr Koloane had used
the name of President Zuma in vain, one would have expected President Zuma
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to have been outraged with him. However, when Mr Koloane left the Department
17 In matters relating to the Guptas, it seems that the President, is content for
18 Apart from President Zuma, there appear to be three known points of contact
2012;
18.2 Duduzile Zuma, the Presidents daughter from his third wife, the late Kate
Matsho; and
18.3 Duduzane Zuma, the Presidents son from this third wife, the late Kate
Matsho.
19 The bulk of this chapter is dedicated to Duduzane Zuma, given the extent of his
relationship with the Gupta family. Before addressing this relationship, however
we briefly set out the ties between the Guptas and Gloria Bongi Ngema-Zuma
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21 Public records reveal that, during 2010, the Gupta family assisted to purchase a
21.1 CIPC documents show that, in the first quarter of 2010, Ngema-Zuma
21.2 In April 2010, shortly after the Sinqumo Trust was registered, the trust
Property.
21.3 According to reports, the Property cost R5.4 million. The Bank of Baroda
April 2016, the City Press reported that it had been granted access to the
JIC Mining. City Press reported that an extract of the minutes of a JIC
Mining board meeting held on 10 February 2010 recorded that the Bank
R3.84 million, on condition that JIC would guarantee all amounts owed by
Sinqumo Trust under the facility. The JIC Board agreed to do this.41
38See Annexure ZGF 13. Also see Comrie, S. (2017). First Ladys house backed by Guptas. [online] CityPress.
Available at: http://city-press.news24.com/News/first-ladys-house-backed-by-guptas-20160417
39 See Annexure ZGF 14. Also see Code for South Africa. (2017). Trusts | Open Data | Code for South Africa.
[online] Available at: https://data.code4sa.org/dataset/Trusts/3jhi-ewix/data?q=Sinqumo.
40 See Annexure ZGF 15.
41 See Annexure ZGF 16.
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21.4 Mabengela Investments (Pty) Ltd is a Gupta linked company in which Tony
recently obtained from the Sahara Company server show that Mabengela
Investments (Pty) Ltd pays R65 000.00 per month,42 which is labelled as
regards the gratuitous payment of R65 000 per month for the benefit of
21.5 This inference as to the true reason underlying the Gupta family
fact that the Gupta family have sought to conceal the facts in this regard.
that the Gupta family or its businesses contributed in any way to the raising
as president of the ANC, Duduzile Zuma was appointed to the Board of Sahara
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24 When she was appointed to Saharas Board, Duduzile was only 26 years old. It
is unclear whether she had any tertiary qualifications. She certainly had no
business experience that could qualify her for such responsibility in a company
of the size of Sahara. The only reasonable conclusion is that her appointment
25 The timing of her appointment was no coincidence. It took place just after
President Zumas election as ANC President and when it was now inevitable that
26 During a 2011 interview with the City Press newspaper, 45 Duduzane Zuma is
I was introduced to the Gupta family by my father in late 2001, just like
I met many peopleAt that time, my father said, Ive got an interest in
taking an IT direction in my life, and at that point they were doing the
45 News24. (2017). I would have been further if my surname wasnt Zuma. [online] Available at:
http://www.news24.com/Archives/City-Press/I-would-have-been-further-if-my-surname-wasnt-Zuma-20150429.
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plundering.
At the time, he was only 26 years old and could boast no obvious
qualifications.
27.2 Duduzane Zuma was appointed to the board together with his twin sister,
President Zumas election as President of the ANC, and with that election,
Republic in 2009.
28 At the age of 35, Duduzane Zuma has amassed a vast fortune. He has multiple
entities:
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28.3 Localiga;
an email chain from the Sahara companys server 47 which shows how he
wrote an email to Duduzane Zuma. From the tone of this email, this was
not the first time the two had corresponded. In the email, Chuikov wrote:
I hope you are well and enjoying the run up to Christmas and
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was travelling at the time, and could only attend to the request upon his
wrote:
I hope you are well and back following your travels. I wanted to
that his schedule must be very busy but we would naturally aim
to find the most convenient time. Please let me know if this could
be arranged.
29.4 On 20 January 2015 Duduzane Zuma sent the details of George Moloisi
who is the man who could arrange the meeting. It was clear from this
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have spoken and are now discussing suitable time for the
Thank you for setting up the meeting with President Zuma for our
in South Africa.
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30.2 In Chapters 3 and 4 below, we show how individuals friendly to the Guptas
were appointed to high public offices after their CVs were forwarded to
Duduzane Zuma:
30.2.3 Mr Colin Matjila was appointed to the Board of Eskom after his
to Duduzane Zuma.
(iv) The abuse of the Presidents powers in favour of the Gupta family
31 President Zuma has shown a readiness to utilise his position, and the influence
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32.1 President Zumas apparent willingness to turn a blind eye to the conduct
fiasco and the letter to Sheikh Mohammed Bin Rashid Al Maktoum, and
32.2 his intervention with Mr Rocha in support of Duduzane Zuma and the
Guptas.
the conduct of banks that refused to do business with the Guptas. That
Committee was appointed by the Cabinet over which President Zuma presides.
35 In late 2010, the Gupta family were in the process of establishing their
newspaper, The New Age. GCIS is mandated to, inter alia, handle State
account to the Public Protector, which is paraphrased below from the State of
Capture report:48
48 Public Protector, State of Capture report, Report 6 of 2016/2017 at p97, para 5.20
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35.1 In late 2010 Maseko received several requests for meetings from
35.2 On the day of the meeting, while en route to the venue, Maseko received
indicated that the President desired to speak with Maseko. When the
President came on the line, he greeted Maseko and said kuna labafana
translated, this meant that the following: The Guptas need your help.
35.3 Maseko told the President that he was en route to Saxonwold, when the
35.4 Mr Maseko met with Ajay Gupta and one of his brothers. During the
New Age. When Mr Maseko raised the fact that the advertising spent in
fact lay with the individual departments, Mr Ajay Gupta was undeterred.
35.5 A few weeks later, a senior staffer at The New Age demanded a meeting
with Maseko on the following day. Mr Maseko was on his way to the
Nedbank Golf Challenge in Sun City, and indicated that he was unable to
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refused, Ajay Gupta said: I will talk to your seniors in Government and
36 These examples illustrate the control of Presidential power to assist the Guptas
and the assumption on the part of the Guptas that they can depend on executive
chapters that follow, we show how this assumption of the Guptas is borne out by
significance to them:
36.1 The Department of Public Enterprises which exercises control over the
state owned enterprises from which billions of rands have been diverted
to Gupta companies,
36.2 The Department of Mineral Resources, which exercises authority over the
36.4 The Ministry of Finance that has attempted to protect State resources from
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1 President Zuma, and his appointed Ministers for Public Enterprises, Malusi
Gigaba and Lynne Brown, have overseen the plundering of billions of rands of
Gupta family, Duduzane Zuma and their business associates.49 This includes,
1.1 Transnets unlawful award of a R50 billion tender for freight locomotives in
1.1.2 The Gupta family and Duduzane Zuma stood to earn lucrative sub-
49A spreadsheet prepared by Sahara of the Sahara Group of companies is attached SOE 1. It describes many
(but not all) of the Gupta companies.
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60% stake and Wood a 25% stake and to which Mr Wood took the
name of Regiments Capital, has since late 2015, earned more than
21,5% stake.
1.4 Eskoms conclusion of a R43 million contract with the Guptas media
company, TNA (Pty) Ltd in October 2014. South African Airways, Transnet
and Denel have concluded similar contracts with TNA Media for millions
of rands.
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2 In its analysis of the capture and exploitation of SoEs, the State Capacity
Research Project describes the repurposing modus operandi that has been
employed by the Guptas and their associates, with the apparent complicity of
People brought on to the board who have close personal links to some of
interest.51
4 Notwithstanding the medias exposure of the corruption and conflicts that have
been exploited on the SoE Boards, the current Minister of Public Enterprises,
Lynne Brown has continued to appoint to and recycle across SoE Boards the
very individuals who are identified as colluders with the Guptas and their
50 Betrayal of the Promise: How South Africa is Being Stolen, May 2017. Available online at:
http://pari.org.za/wp-content/uploads/2017/05/Betrayal-of-the-Promise-25052017.pdf.
51 Betrayal of the Promise: How South Africa is Being Stolen, May 2017. See p 47.
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7 Moreover, President Zuma has exercised his powers under section 12(1)(a) of
the Public Service Act 1994 to appoint as Director General of the Department of
Public Enterprises, Mr Richard Seleke, a person who has a lengthy track record
of abusing his office to promote the interests of the Guptas and Duduzane Zuma.
By so doing, President Zuma has facilitated the improper use of public resources
8.1 Ministers Malusi Gigaba and Lynne Brown have abused the public office
52 Public Protector, State of Capture report. Report 6 of 2016/2017 at p 90, para 5.16(e).
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8.2 President Zuma has abused his appointment powers in appointing and
8.3 An improper relationship exists between President Zuma and the Gupta
family.
9 The remainder of this chapter details the key facts and the supporting evidence.
exclusively in the President in terms of section 12(1)(a) of the Public Service Act.
December 2015. He did so after Mr Seleke had forwarded his curriculum vitae
Enterprises.53
11 Mr Seleke has had an unlawful and improper relationship with the Gupta family
53 A copy of the email from Mr Seleke and the attached CV and certificates are Annexures
SOE 2, SOE 3 & SOE 4
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Businessman.
11.2 Using his infoportal1 address Mr Seleke had acted as a conduit between
persons associated with South China Railways and the Gupta family. On
54 See http://www.mycorporateinfo.com/in/business/csr-zelc-(india)-private-limited/U52100MH2015FTC261540.
55
The email and the spreadsheet are attached as Annexure SOE 5 & SOE 6. The Gupta role in the Transnet /
CSR locomotive purchase is discussed below.
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Mr Chawla;56 and
Tony Gupta.57
Gupta family in relation to Eskom matters was not confined to the Tegeta
Seleke a letter from Just Coal (Pty) Ltd complaining about Eskoms
Stations including Rotran, Matla and Arnot. The cancellation of the Just
Coals coal supply contract would provide an opening for the Guptas to
through Tegeta. In this context, Mr Kokos email stated [p]lease give the
Boss. The fight begins. Mr Seleke had no difficulty identifying who the
56 The email and the letter are attached as SOE 7 & SOE 8
57 The email and the opinion are attached as SOE 9 & SOE 10
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11.6 Mr Seleke appears to have been involved with the Gupta company
analysing trends in the rand exchange rate, the balance of payments and
the balance of payments over the periods of office of all Presidents and
Minister.
58 The email and the letter are attached as SOE 11 & SOE 12
59 Copies of the emails and draft agreements or resolutions attached thereto are attached as Annexures SOE 13
- SOE 26.
60 Copies of the email and the attached letter from the Minister are attached as Annexures SOE 27 & SOE 28.
61 Copies of the email and the attached letter from the Minister are attached as Annexures SOE 29 & SOE 30.
62 Copies of the email and the attached letter from the Minister are attached as Annexures SOE 31 & SOE 32.
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12 The Public Enterprises portfolio is one of particular importance for the Guptas
because of their interest in contracts with state owned enterprises. Against the
14 Shortly after his appointment, Minister Gigaba appointed Gupta linked individuals
to Transnet and Eskoms Boards, where they oversaw the R50 billion
Sharmas known ties to the Gupta family.63 Instead, in June 2011, Mr Sharma
became the chairperson of the Transnet Boards new Acquisitions and Disposals
Committee.
63amaBhungane, #GuptaLeaks: Guptas and associates score R5.3bn in locomotives kickbacks, 1 June 2017,
Available at: http://amabhungane.co.za/article/2017-06-01-guptaleaks-guptas-and-associates-score-r53bn-in-
locomotives-kickbacks
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Transnet, and in July 2012, Minister Gigaba appointed Mr Anoj Singh as CFO of
Transnet.
17 Messrs Sharma, Molefe and Singh oversaw the issue, in July 2012, of a tender
18 The tender was awarded on 17 March 2014. The tender award was split between
four suppliers (on the advice of Regiments Capital). These included China South
Rail (Hong Kong) Co. Ltd, which was contracted to supply 359 locomotives
60% of the electric locomotives procured; China North Rail, General Electric and
Bombardier.
19 The leaked records from the Sahara computer server have revealed that a
services fee of the contract value of Transnets procurement from China South
Rail (dubbed CSRs Project 359) i.e., R3.8 billion of the R18.1 billion contract.
20 Tequesta is a Gupta front company set up with the knowledge and assistance of
Mr Seleke for the purposes of channelling public funds to the Guptas. Its sole
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Project 359.
21.1 Clause 6.1.1 provides that Tequesta shall be entitled to an Advisory Fee
21.2 Extraordinarily, the final clause of the contract (in Annexure A) provides
that:
The company [CSR] will not require any proof of delivery of the above
22 The most innocent interpretation of this clause is that it reflects that Tequesta
was able to peddle the Gupta familys political connections within Transnet, in
Transnet placed two further procurement orders with CSR for another 95 and
100 electric locomotives, at a cost of R2.7 billion and R4.4 billion, respectively.
It appears that no competitive tender process was followed for these acquisitions.
Tequesta claimed the same 21% service fee from CSR for these contracts
bringing its total earnings from Transnets procurement from CSR to R5.3 billion.
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24 Reconciling leaked records, AmaBhungane has exposed the particular role that
locomotives from CSR. AmaBhungane explains that, six months before the
competing offer for the provision of 100 electric locomotives from Japans Mitsui
Gupta and senior Gupta employee Ashu Chawla. By this time, it should be
noted, Sharma was about to be a business partner to Essa and the Guptas
he was negotiating his and their imminent joint acquisition of VR Laser, a steel
locomotives from Japans Mitsui & Co pending the finalisation of the 1,064
tender, which had been delayed. If the Guptas were batting for CSR, the award
solution.
To Rajesh Gupta, better known as Tony, Sharma e-mailed two letters: One
from him to the department of public enterprises director-general, and the other
65 Copies of this article and the emails that it cites are attached as Annexures SOE 34 - SOE 37
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The letter to the director-general was in the form of Sharma seeking advice
own view as chairman is to decline the request for confinement and procure
He added that it could appear that Transnets freight rail division, which had
and disposals committee] to not grant approval for this procurement with a
confinement.
The record shows that Mitsui & Co did not get the contract for the extra 100
locomotives, but that CSR did. We could find no evidence that this followed an
open tender. End result: By early 2014, CSR had contracts to supply Transnet
25 While the Guptas and their business associates gained directly from the Transnet
procurement from CSR, they also stood to benefit indirectly through the local
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26 In February 2014, a few weeks prior to Transnet being awarded the locomotives
tender (on 17 March 2014), Tony Gupta and Duduzane Zuma acquired shares
27 Each of the four winning bidders visited VR Laser Services to assess the
condition.
consultant services from Regiments Capital and later Trillian, both Gupta-linked
companies.
29 The Regiments Group comprises inter alia Regiments Capital (Pty) Ltd which is
Mr Wood has a 32% shareholding in the Regiments Group through the Zara
Family Trust. The other two directors and major shareholders in the Group are
Mr Litha Nyhonyha and Mr Niven Pillay. Mr Wood had always been the director
primarily responsible for Regiments Capital. In the course of 2015 and early
2016 Mr Wood fell out with Mr Nyhonyha and Mr Pillay. According to the latter,
agreement in terms of which Mr Wood would leave the Regiments Group but
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take with him the advisory business he had been conducting in the name of
Regiments Capital (Pty) Ltd and would either pay Mr Nyhonyha and Mr Pillay or
be paid by them, the amount necessary to ensure that what he took out of the
Regiments Group accurately reflected his 32% interest in the Group. Mr Wood
ultimately took his financial advisory business to Trillian Capital (Pty) Ltd on 1
March 2016.66
Regiments for advisory services ballooned, and then how Trillian acquired the
Promise report.67
payment for their services appears to have been facilitated primarily by the
32 In summary:
66 Mr Woods dispute with Mr Nyhonyha and Mr Pillay remains unresolved. It is being ventilated in the Gauteng High
Court, Johannesburg in case number 35530/2016. The facts stated in this chapter relating to Mr Wood, Regiments and
Trillian emerge from the papers in that case.
67 Supra at pp 28-30.
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32.2 Mr Singh proceeded to transfer the bulk of the work under the McKinsey
68 Betrayal of the Promise: How South Africa is Being Stolen, May 2017. Available online at:
http://pari.org.za/wp-content/uploads/2017/05/Betrayal-of-the-Promise-25052017.pdf at p 28.
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for this.
resigned unexpectedly. The media reported that she told her staff: I
arrived here with integrity, and I will leave with my integrity intact. She
32.3 In 2015, the Guptas reportedly sought to buy a stake in Regiments Capital.
After the directors of Regiments refused the purchase offer, the Guptas,
32.4 In December 2015, Transnet (now acting under its new Board) paid Trillian
R93.5 million for acting as the lead arranger for a R12 billion loan by a
from the papers in Mr Woods dispute with his former partners that he
performed most of the work relating to the arrangement of the R12 billion
loan while he was still employed by Regiments Capital, yet Transnet paid
69 Sunday Times Transnet deals fall into Gupta mans lap, 22 May 2016.
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the R93.5m to Trillian. Moreover, the Betrayal of the Promise report notes:
70
Usually in such a deal, the lead arranger would be one of the lenders
have arranged the loan itself. Trillian allegedly did at least R170 million
worth of work for Transnet. It remains unclear what kind of work could
32.5 In August 2016, AmaBhungane reported that, by the end of June 2016,
Transnet had paid Trillian a further R74 million for invoices that appeared
allocated.71
box company, Homix (Pty) Ltd, to secure contracts from Transnet. A further R25-
million was agreed but not yet paid. Neotels CEO, Mr Sunil Joshi reportedly
70 Betrayal of the Promise: How South Africa is Being Stolen, May 2017. Available online at:
http://pari.org.za/wp-content/uploads/2017/05/Betrayal-of-the-Promise-25052017.pdf at p 28. at p 29.
71 amaBhungane , Gupta-linked firms R167m Transnet Bonanza, 28 August 2016.
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companys auditors blew the whistle to it in April 2015. Neotel had made two
million in April 2014 (after Neotel was awarded the R300 million network
the company was indeed no more than a front, with ties to the Guptas primary
The company through which at least R250-million owed was a hole in the wall
led by a ghost. With millions in its account, Homix was no more than a room
Its sole director, one Yakub Bhikhu, is untraceable and his credit history gives
72 AmaBhungane, The Guptas and the R250 million kickback laundry, 29 October 2016.
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Homixs bank records show no sign that the company had staff. There were no
salary payments, and only four months of payments to Vodacom for what
For the rest, the cash just flowed out again, mainly to Bapu Trading a
At the end of the six months in April last year, Homixs account had a balance
of less than R200,000. But tens of millions more must have flowed in, as the
protector Thuli Madonsela and leaked this week, records that Homix purchased
But Mercantile got suspicious and reported three of the purchases, totalling
froze it after inquiries revealed that customs documentation for the supposed
illegally.
The R51-million that got through to Hong Kong, according to the report, went
Chinese resident.
South African. But amaBhungane could not trace him either, not least as the
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about where the money may have gone. It is a small, 15th floor office in Sheung
The same flat is also the registered address of three Essa companies
possible bribery.
involvement in the scheme of Transnets CFO, Mr Anoj Singh and CEO, Mr Brian
Molefe, who approved the awards to Neotel. The background to these contracts
At the end of 2013, Transnet put the master agreement out to tender. It was
agreement some months later, an insider said, when it became apparent its
In April 2014, during this hiatus, Neotel paid its first R30-million to Homix. The
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In August 2014, Transnet notified Neotel that it was the new preferred bidder
for the master agreement and that negotiations should be concluded before
Christmas.
cannot be identified.
A week later, they said, Neotels chief executive, Sunil Joshi, met Transnets
procurement structures reported. After the meeting, Joshi allegedly asked his
A success fee was agreed with Homix 2% of the R1.8-billion value of the
The next day, a Saturday, representatives from both sides met and resolved
remaining issues without any overt assistance from Homix. The master
to Neotel without any tender and while Neotel was interacting with Homix.74
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from June 2010 to December 2014. Leaked email records over this period
& Cos proposed urgent sale of electric locomotives to Transnet; and the
committee in May 2014. The committee then agreed to escalate the costs
About a week before this meeting, Sharma sent the agenda to Tony Gupta
40.2 Brian Molefe was Transnet's CEO from February 2011 to March 2015.
40.2.1 The Public Protector recorded in the State of Capture report that:76
2016 that Mr Molefe is his very good friend and often visits his home in
Saxonwold.
75 The email and the document are attached as Annexures SOE 38 & SOE 39
76 Public Protector, State of Capture report, Report 6 of 2016 at para 5.95, p 122.
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calls to and from Ajay Gupta, and made frequent visits to the
40.3 Anoj Singh worked as Transnets CFO from July 2012 to August 2015.
40.3.1 From 6 to 9 June 2014, Singh stayed at the Oberoi Hotel in Dubai
with Tony Gupta. This was three months after Transnets award
40.3.2 From 7 to 12 August 2014, Singh again stayed at the Oberoi Hotel.
saying [p]lease swipe the card for all charges. It was during that
77 Public Protector, State of Capture report, Report 6 of 2016 paras 5.96-5.101, pp 122-124.
78 See Annexure SOE 40
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bidder. 79
Guptas, R41m. 80
40.3.4 Singh was again hosted in the Oberoi from 24 to 26 February 2015.
2017.
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41 Minister Gigaba appointed Colin Matjila to Eskoms Board in June 2011 and as
Acting CEO on 1 April 2014. This was after Mr Essa sent Mr Matjilas CV to
Tony Gupta on 22 March 2014 and Tony Gupta forwarded the CV to Duduzane
42 Mr Matjila has shared directorships with Mr Essa, in Inca Energy (Pty) Ltd -
960 (Pty) Ltd where he is a co-director with the CEO of Oakbay Resources, Ms
Ronica Ragavan.
responsible for irregularly approving Eskoms R43 million contract to sponsor the
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personal or business relationships with the Gupta family and their close business
associates:84
44.1 Dr Ben Ngubane, who Brown also appointed as chair of the Eskom Board
the natural resources exploration company, Gade Oil and Gas (Pty) Ltd
44.2 Mr Mark Pamensky, who sat on the Board of the Guptas Oakbay company
(Oakbay Resources and Energy (Pty) Ltd) until May 2017.86 Mr Pamensky
which the Guptas hold a stake, including Shiva Uranium (Pty) Ltd, Yellow
Star Trading 1099 (Pty) Ltd, and BIT Information Technology (Pty) Ltd. Mr
44.3 Ms Viroshni Naidoo who is the wife of Mr Kuben Moodley and a friend
84Public Protector, State of Capture, Report 6 of 2016/2017 at pp 119-120 paras 5.74 5.80. Also
see amaBhungane ,The 'Gupta owned' state enterprises, 24 March 2016.
85 Ben Ngubane resigned from the Eskom Board in June 2017.
86Pamensky resigned as Eskom director in November 2016, after the release of the Public Protectors State of
Capture report.
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44.4 Mr Romeo Khumalo, who was a co-director with Mr Essa at Ujiri Mining
company.
45 Minister Brown transferred both Brian Molefe and Anoj Singh from Transnet to
Eskom.
Eskom;
Eskom; and
46 Under their management, Eskom abused its position to force Glencores sale of
Optimum Coal Mine (OCM) to Tegeta and then allow Tegeta to profit from
lucrative coal supply contracts with Eskom. It did so by, amongst others:87
its coal supply to Hendrina power. The Board referred the matter to then
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Acting CEO, Molefe, who refused to approve the negotiated terms and
arbitration and issuing a summons for the same penalty amount on the
same day. It can only be inferred that Eskom wished to exert pressure on
OCH/OCM88;
46.3 Refusing to re-negotiate terms with OCM and seeking to enforce the
penalty levied against OCM, with the result OCM/OCHs Business Rescue
so that Tegeta emerged as the only remaining entity that wished to make
the purchase;
46.5 Forcing the sale of all shares held by Optimum CH, as Eskom refused to
consent to a standalone transaction with OCM being the only entity sold;
46.6 Concluding lucrative contracts to supply coal to Arnot Power Station with
coal from OCM. This essentially increased the financial stability of OCM
88 Public Protector, State of Capture, Report 6 of 2016/2017 at pp 339, para 6.9. (l).
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OCM; and
million, for the purchase of coal from Tegeta and delivery by OCM to Arnot
very same day on which Tegetas request for approximately R600 million
of bridging finance for the purchase of all shares in OCH was made to,
and rejected by, the Loan Consortium of Banks and the day before
48 Eskoms role in unlawfully assisting Tegeta to force the sale of OCM and all the
shares in OCH, and its subsequent award of coal supply contracts to Tegeta for
OCHs coal mines, is detailed in the Public Protectors State of Capture report.
49 In examining the role of the Board, the Public Protector disclosed evidence in the
form of cell phone records of Mr Molefes regular interactions with Ajay Gupta
and his close business associates in Tegeta. The Public Protector found that:90
49.1 Between the period of 2 August 2015 and 22 March 2016 being the
period when Tegetas forced purchase of OCM and OCH was being
89 amaBhungane and Scorpio, #GuptaLeaks: How Eskom was captured, 10 June 2017.
90 Public Protector State of Capture Report 6 of 2016/2017 at p 300-303, para 6.1.
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to him. Of the calls made, 7 were made between 9 April 2016 and 12 April
2016. This includes one call made on 11 April 2016, when the prepayment
49.3 Mr Molefe was in the Saxonwold area, where the Gupta family resides, on
50 The Public Protector concluded that the evidence reveals a distinct line of
their companies in the form of Ms Ragavan and Mr Howa. These links cannot be
ignored as Mr Molefe did not declare his relationship with the Gupta family.91
Trillian Capital Partners (Pty) Ltd over R400 million for management consulting
and advisory services.92 Trillian Capital is 60% owned by Trillian Holdings (Pty)
Ltd (a company in which Salim Essa has a majority stake and is the sole director)
and 25% owned by Zara W (Pty) Ltd (a company owned and directed by Eric
Wood); Eric Wood is one of the three directors of Trillian Capital; and Trillian
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Coal Mine.93
52 The leaked records provide further evidence of corrupt ties that have facilitated
these deals. After he became Eskom CFO, Anoj Singh stayed in the Oberoi
Hotel in Dubai from December 17 to 24, 2015. The bill was sent to the Gupta's
Sahara Computers. This trip started two days after Tegeta obtained Optimum
Coal Holdings.94
53 In the wake of Molefes resignation (following the release of the Public Protectors
responsible for securing coal for power stations), Koko had approved
53.2 As has been pointed out above, Mr Koko repeatedly leaked confidential
53.3 In January 2016, Mr Koko and Mr Mantsha, the CEO of Denel were flown
In advance of their stay, Mr Chawla wrote to the hotel stating: Sahara will
93 Public Protector State of Capture Report 6 of 2016/2017 at p 269 paras 5.304 5.306.
94 See Annexure SOE 46
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pay the entire bill, please do not ask any credit card guarantee from the
visa to India for her son Sphilile Malcolm Mabaso. They also
54.1.2 Sphilile Malcolm Mabaso was also a business associate and co-
54.2 Minister Brown was also responsible for the appointment of Mr Seleke to
55 On 24 July 2015, Minister Brown overhauled the Denel Board, leaving only one
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55.1 A company in which Mr Motseki is the sole director was allocated 1,3% in
55.2 The Guptas had sponsored a trip by Mr Motseki to Mumbai and Delhi in
2010. 99
Motseki had assisted to procure a donation of R850 000 from the Guptas
56 The list of new Denel Board members that Minister Brown recommended to
As the State Capacity Research Project notes, the new Denel Board also lacked
skills and experience: there was, for example, not a single engineer (Denel being
57 Minister Brown again appointed known Gupta and Zuma associates to the Board.
CEO, Mr Riaz Salojee, its CFO, Mr Fikile Mhlontlo and company secretary, Ms
Elizabeth Africa. No formal reasons were given at the time. The suspensions
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Systems South Africa from BAE Systems, but questions were raised about the
strength of the charges.102 There were strong suspicions that the three company
managers were suspended to make way for the Denel VR Laser Asia deal.103
59 As the chair of the Denel Board, Mr Mantsha oversaw the conclusion of the
Denel Asia joint venture between Denel and VR Laser Asia, a Guptaaligned
company.104
59.1 VR Laser Asia is wholly owned by Gupta business partner, Salim Essa,
59.2 Westdawn Investments (also known as JIC Minister Services) has a 25%
stake in VR Laser Services, and Salim Essa has a 75% stake. Duduzane
59.3 VR Laser Services is registered to the same Sandton office park where
59.4 VR Laser Services has only three directors: Salim Essa, Pushpaveni
102 Mail & Guardian, VR Laser and the Guptas, 5 February 2016.
103 Mail & Guardian, Guptas conquer state arms firm Denel, 5 February 2016.
104 amaBhungane, How Denel was highjacked, 30 May 2016.
105 amaBhungane, Guptas conquer state arms firm Denel, 5 February 2016.
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nephew of the Guptas in his mid-20s, who gives as his address the
60 On 10 December 2015, the day after President Zuma appointed Des Van
61 The Denel Asia joint venture was formally announced in January 2016. The joint
venture was concluded by Denel without approval from the Minister of Finance
Management Act.
62 The incentive for the deal was apparently a US $4 billion tender to deliver long-
range artillery to the Indian army. However, the terms of the deal were weighted
62.1 Drafts of the joint venture agreement forwarded to the Guptas and Mr
Seleke show that Denel gave up its intellectual property to Denel Asia in
62.2 Moreover, in relation to its Indian operations, Denel Asia proposed to enter
106 Mail & Guardian, VR Laser and the Guptas, 5 February 2016. The joint venture was dissolved and
derregistered in May 2017.
107 amaBhungane, GuptaLeaks: How the Guptas screwed Denel, 10 June 2017.
108 See the drafts of the Investment Company Agreement and the JV Agreement forwarded to the Guptas and Mr
Seleke on 18 October 2015 which are attached as Annexures SOE 21, SOE 22, SOE 23, SOE 24 and the files
called Attachment.docx attached to both emails)
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that Denel SOC Ltd. had licenced Denel Asia to manufacture or sell. 109
63 The email records on the Sahara company server evidence direct and improper
ties between Mr Mantsha and the Guptas. The emails evidence that
63.1 Mr Mantsha was flown to and accommodated in India and Dubai at the
63.1.1 In August 2015, Mr Mantsha was flown to India, in the Guptas jet
accommodated for a few nights with the Guptas at the ICT Maratha
Flights were booked for all three by the Guptas travel agents and
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Public Enterprises.
up. The e-mail was marked confidential and was meant to advise
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63.3 Mr Mantsha also sent the Guptas his personal bills. On 3 August 2015,
Mantsha sent his municipal rates bill of R14 238 for his Randburg home,
dated 11 June 2015, to Sahara's CEO, Ashu Chawla, saying: Please find
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MOSEBENZI ZWANE
Resources evidences his use of presidential powers to promote and protect the
interests of the Guptas and their business associates, including the Presidents
improper relationship exists between President Zuma and the Gupta family.
Zuma after first being vetted by members of the Gupta family, and without
3.2 Prior to his appointment, in June 2012, as MEC for Agriculture in the Free
dairy project with Estina (Pty) Ltd, which has cost the province at least
R184 million. The Guptas were intimately involved in the project and were
beneficiaries of it.
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3.3 Shortly after the launch of the Vrede dairy project, in October 2012, Zwane
(and his local gospel choir) were gifted by the Guptas to an all-expenses
3.4 In March 2013, as MEC for Agriculture and Rural Development in the Free
State, Minister Zwane furnished invitees for the Gupta Sun City wedding
with an official invitation from the MECs office, which facilitated the landing
meetings with Tony Gupta. Minister Zwane was also flown to, and
accommodated at, the luxury Oberoi Hotel in Dubai, in the company and
Zwane has attended Gupta family weddings in South Africa and India, at
the Guptas, their close business associate, Mr Salim Essa and Duduzane
Glencores CEO, in the company of Atul Gupta, Ajay Gupta and Mr Essa,
to influence Glencore into selling its Optimum Coal Mine to Tegeta. This
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Tegeta.
3.7 While the dispute over Optimum Coal was taking place, and Eskom was
Seleke, who had been Mr Zwanes Director General in the Free State
Optimum Coal Mines R1.43 billion rehabilitation trust fund into Bank of
Baroda accounts, without ensuring that these funds were properly ring-
fenced and secure and would be utilised for its proper purpose. The fate
3.10 As Minister of Mineral Resources, Zwane has been instructed in his public
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open.
3.13 Despite the fact that Minister Zwane had publicly misrepresented what
Zuma and remains responsible for the Mineral Resources Portfolio that is
4 In the light of these facts, the following conclusions can be drawn with
confidence:
4.1 Zwane has an improper relationship with the Gupta family, and has
abused his public office to enrich the Gupta family and their business
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4.2 President Zuma has abused his powers of appointment in appointing and
the interests of the Gupta family and their business associates, including
4.3 An improper relationship exists between President Zuma and the Gupta
family.
5 The remainder of this chapter details the key facts and the supporting evidence.
7 Mr Zwane was appointed Minister less than a month after being sworn in as a
for Agriculture and Rural Development (2014 2015) and MEC for Economic
Development, Tourism and Environmental Affairs (2009 2013) in the Free State
117 Staff, P. (2017). New minister of mines tainted by Gupta family link. [online] The M&G Online. Available at:
https://mg.co.za/article/2015-09-23-new-minister-of-mines-tainted-by-gupta-family-link.
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ANC National Executive Committee, which had met the previous weekend and
9.1 On 1 August 2015, less than two months before President Zuma appointed
Zuma.120
118 Mosebenzi Zwanes profile on the Department of Mineral Resources website: http://www.dmr.gov.za/about-
us/the-ministry/minister.html.
119 ANC, Statement of the ANC following the NEC Meeting, 18-20 September 2015, at
http://www.polity.org.za/article/anc-statement-of-the-anc-following-the-nec-meeting---18---20-september-2015-
2015-09-21.
120
These emails are attached marked MJZ 1 and MJZ 2.
121AmaBhungane Reporters, M. (2017). Gupta past haunts new mines minister. [online] The M&G Online.
Available at: https://mg.co.za/article/2015-09-23-gupta-past-haunts-new-mines-minister/.
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stated that he was removed as minister and replaced by Minister Zwane after he
resisted pressure from Eskoms CEO, Minister Brian Molefe and Eskoms
relationship with the Gupta family and has abused his position on the Transnet
and Eskom boards to further their interests.123 At the time that he pressurised
then the owner of Optimum Coal Mine, which was subsequently purchased (with
the assistance of the new Minister Zwane) by the Gupta-Zuma owned company,
Tegeta. The Optimum Coal mine became the subject of lucrative coal-supply
more favourable to Tegeta than those to which Glencore had been subject prior
to the purchase, and which, for no apparent reason, obliged Eskom to purchase
the coal from Tegeta at a price of 19.69/GJ as opposed to the price of R18.68/GJ
which was the Optimum Coal Mine price to Tegeta and the price for which Eskom
122 AmaBhungane, How Brian Molefe helped Gupta Optimum heist, 16 May 2017.
123 Reference to chapter on SOEs
124 Public Protector State of Capture report p 313 para z.
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allegations that Eskom chief executive Brian Molefe and chair Ben
When he did not comply, he says, President Jacob Zuma fired him within
weeks.At the time the Gupta family were angling to buy Optimum, the
Glencore, which then owned Optimum, had placed it into business rescue
resources, said he met with Molefe and Ngubane at the latters insistence.
penalty.
Eskom had tried to issue a legal summons for the penalty on 5 August
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day before, batted away the claim, citing legislation which restricts new
Ramatlhodi told amaBhungane: They insisted that I must suspend all the
time. I said to them: how many mines do these people have supplying
Eskoms coal needs, including virtually all of the coal for the Hendrina
power station.
He said Ngubane then told him that he would have to report on their
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victory over the Nazis in World War II. There he was due to meet Russian
replace Ramatlhodi.
but fired him along with finance minister Pravin Gordhan and other
13 In and about mid-2011 to mid-2012, Mr Zwane (as MEC for Agriculture and Rural
Development in the Free State Province) and Free State Premier, Ace
14 Despite repeated denials from the Gupta family and those involved in the project,
as is shown below, it is now evident that the Gupta family and their associates
15 Under the Vrede dairy project, MEC Zwanes Department of Agriculture awarded
a Gupta-linked company, Estina (Pty) Ltd, a 99-year, rent-free lease on the 4400-
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million in total) to set up the farming operation and dairy on the property. No
tender processes were followed and no due diligence of Estina was conducted
reported that the company that was awarded the contract, Estina, had no
apparent capacity to manage and implement the project. Estinas sole director
was Kamal Vasram, who worked in information technology (as a retail sales
background. In its proposal, Estina claimed that an Indian company, Paras Dairy
was jointly involved in the project and would provide expertise. This claim was
refuted by Paras Dairy, which claimed that it had no knowledge of the project.127
contracts with Estina. The results of this investigation were not published by
126AmaBhungane, Guptas farm cash cows in Free State, 31 May 2013; AmaBhungane Gupta dairy project milks
Free State coffers, 7 June 2013; AmaBhungane Gupta dairy flouts treasury rules, 14 June 2013.
127
AmaBhungane, Guptas farm cash cows in Free State, 31 May 2013; AmaBhungane Gupta dairy project milks
Free State coffers, 7 June 2013; AmaBhungane Gupta dairy flouts treasury rules, 14 June 2013.
128 Mineweb, Zwane appoints loyalist to key position at DMR, ignores due process, 2 November 2016;
AmaBhungane, Zwane and his new appointment go way back, 3 November 2016; City Press, Mosebenzi Zwane
in controversial DG appointment, 13 November 2016.
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officials about the bizarre contract to develop a large dairy and milk processing
The Free State agriculture department did not follow any supply-chain
company;
any involvement;
The Free State paid grants directly into Estina's bank account and the
responsible official admitted she had no real evidence of how the money
A feasibility study was done only after the contract was signed; It
share in the scheme, were only identified recently and the official could
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Approval for the project was rushed through despite the fact there was
government rent-free. Now they get to make a fortune off the infrastructure.
19 This article, titled Free State dairy project damned in treasury investigation is
attached.130
Department cancelled its contract with Estina (Pty) Ltd.131 Management of the
project was taken over by the Free State Development Corporation (FDC). The
FDC indicated that the cow housing shed was inadequate, and that the
processing plant that was built by Estina would require additional investment, if
it was viable at all. The FDC also reportedly admitted (in a meeting of the
129 As at 14 June 2017, the transcript is still available online at the published address.
130 See Annexure MJZ 4.
131 Among the recommendations of National Treasurys investigation was that the Head of the Department and
Chief Finance Officer face disciplinary hearings. The MEC for Agriculture and Rural Development has however
indicated in the reply that no disciplinary action will be instituted. National Treasurys investigation was carried out
at a cost of R868 447.33 and has subsequently been ignored. See: Politicsweb, Vrede Dairy Project controversy
deepens - MEC's reply creates more questions than answers, 3 August 2015.
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that none of the 80 beneficiaries purportedly identified for the project are currently
involved in it.132
22 The provincial government, Estina, the Gupta family and Vasram all denied any
Trading.134 However, emails from the Sahara computer server evidence that
the Guptas were intimately involved in the project. They evidence further that
the Guptas have been the beneficiaries of tens of millions of rands that the
offshore Gupta-front company called Gateway Ltd (registered in the United Arab
Emirates).
23 The evidence of the Gupta family and associates involvement in the scheme,
and how they extracted public funds from it, is detailed in an amaBhungane/
By the time Estina was kicked off the project in 2014 following a national
Politicsweb, Vrede Dairy Project controversy deepens - MEC's reply creates more questions than answers, 3
132
August 2015.
133See Annexure marked MJZ 5.
134AmaBhungane, Guptas farm cash cows in Free State, 31 May 2013; AmaBhungane Gupta dairy project milks
Free State coffers, 7 June 2013; AmaBhungane Gupta dairy flouts treasury rules, 14 June 2013.
135 See Annexure MJZ 6.
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dumped in a ditch, the provincial government had paid Estina about R184-
that money, supporting the impression that the Guptas not only controlled
the R84-million second tranche at the exchange rate then hitting the
Gupta subordinate.
thanking him for meeting and taking interest in our line of production of
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A little over a week later a similar amount from Estina hit Gateways
account.
Further correspondence shows that Gateway ordered the plant from Star
And so, it appears that of the R84-million remitted to the UAE, R34-million
was for actual dairy equipment although how much was paid to Star
seen.
is not clear.
Although there was some construction at the farm and some cows were
bought, the full use of the remaining R100-million from the total R184-
million that the province paid Estina also remains unclear. On visits to
24 There is compelling evidence to support these allegations, which have not been
meaningfully disputed. The repeated denials by the Guptas, Vasram and the
Department over the Guptas association with the project have also never been
explained.
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25 The evidence obtained from the Sahara computer server includes the following
documents:136
25.1 Emails exchanged between the Gupta brothers and senior Gupta
25.2 Emails exchanged between Ravindra Nath and B. Rajendra CEO of The
Bank of India: Johannesburg that indicate that Gupta group and personnel
Estinas accounting software, and oversaw the flow of monies in and out
of its account.
26 Quite apart from the contents of these documents, the mere fact that they were
Estina.
During the Estina saga, there were ongoing large orders from the Guptas
136
Annexures attached include MJZ 7, MJZ 8A, MJZ 8B, MJZ 8C, MJZ 9, MJZ 10, MJZ 11, MJZ 12, MJZ 13,
MJZ 14, MJZ 15 and MJZ 16.
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Estina was negotiating the project with Zwanes Free State agriculture
In early 2013 there were two more invoices from Vasram to Linkway, for
These invoices suggest that the Gupta consulting company paid Vasram
fees for the Estina work again upending his and the Guptas insistence
28 The invoices from Vasram to Gupta companies (dated May 2011 to August 2012
Zwane and other officials in the Department, for facilitating the Estina scheme.
In October 2012, shortly after the launch of the Estina project, Mr Zwane, officials
from his department and a local gospel choir (the Umsingizane gospel choir) that
137
Refer to attachments MJZ 17A. MJZ 17B, MJZ 17C, MJZ 17D, MJZ 17E, MJZ 17F, MJZ 17G, MJZ 17H and
MJZ 17I.
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Guptas.
30 Details of this trip are evidenced in emails and records from the Sahara computer
30.1 The flight and accommodation bookings for 24 or more travellers, including
30.3 The tour programme which included visits to the Taj Mahal and the
32 Following his trip to India in October 2012, Mr Zwane enjoyed subsequent trips
to India and Dubai, which were arranged and paid for by the Gupta family. These
include:
32.1 A trip to India in December 2013, to attend a wedding with Ashok Narayan
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32.2 A trip to Dubai and Delhi in September 2014, which Gupta employees (at
Sahara) arranged, and which the Gupta family paid for. The flight tickets
evidence that Mr Zwane flew to Dubai, and then Delhi, in the company of
Rajesh (Tony) Gupta and Salim Essa and Suraya Singhala. The purpose
33 The emails records from the Sahara computer server, which evidence these trips
are attached140
34 The Sahara computer server indicates that numerous meetings were scheduled
between Mr Zwane, Tony Gupta and a certain Peter at Sahara and a place
that the following meetings were held between Zwane and Tony Gupta:
5;
No. 5;
139 amaBhungane Gupta past haunts new mines minister, 4 September 2015.
140 Refer to attachments MJZ 21 and MJZ 22.
141 Refer to attachments MJZ 23, MJZ 24, MJZ 25, MJZ 26 and MJZ 27.
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and
Sahara;
35 On 30 April to 2 May 2013, Mr Zwane attended the Gupta family wedding (of
Vega Gupta and Aakash Jahajgarhia) at Sun City, where he stayed for three
Chawla, to use the Guptas helicopter to fly from Grand Central to Harrismith,
with Mr Zwane and Duduzane Zuma named as two of the passengers. 143
37 This history evidences that Minister Zwane has a close association to the Gupta
family and their associates in particular, Tony Gupta and Ashok Narayan.
Minister Zwane met with Tony Gupta regularly throughout 2013 (when the Estina
project was underway) and they continued to meet in 2014. Minister Zwane
travelled with the Guptas using their aircraft and at their expense. Between
October 2012 and September 2014, Minister Zwane travelled to Dubai and India
on at least three occasions, at the Guptas expense. Zwane also attended Gupta
family weddings in South Africa and India, at their invitation and expense.
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Mr Zwane used his position as MEC to facilitate the landing of the Guptas
38 Minister Zwane is implicated in the Guptas use of the Waterkloof Airforce Base
for landing wedding guests from India on 30 April 2013. In March 2013, an official
letter signed and sent on behalf of Minister Zwane (as MEC for Agriculture and
Yadav, a minister in the Indian state of Uttar Pradesh, to visit the province. The
letter of invitation was copied to the Indian High Commissioner to South Africa,
Virendra Gupta. This invitation helped secure the aircraft of wedding guests
landing access at the Waterkloof Air Force Base. Yadav was one of about 200
guests from India who attended the wedding after arriving in the Jetways Airbus
39 The flight for the Gupta wedding, a private civilian affair, was cleared to land at
granted on application from the Indian High Commission, on the basis that the
the Gupta familys Sahara company for approval to land at the Waterkloof Air
Force Base. The Indian High Commissioner to South Africa, Virendra Gupta,
144 Mail & Guardian Free State government gave Gupta guests an alibi, 10 May 2013.
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the strength of the open letter of invitation to an official delegation from Minister
Zwane, the Indian High Commission obtained clearance for the landing from
then-chief of state protocol, Mr Vusi Bruce Koloane. This timing, together with
the fact that the Free State governments official meeting was not publicised at
all, is (at the very least), suggestive of an abuse of powers on the part of Minister
Zwane as MEC.145
41 What is more, a chain of emails from the Sahara computer server evidences that
the letter of invitation was, in fact, prepared by Ashok Narayan and forwarded to
Ashu Chawla. Chawla then forwarded the letter to Minister Zwane to be copied
on an official letterhead.146
International Relations and Cooperation, in the wake of the Waterkloof affair and
Waterkloof airbase available for the Gupta landing by saying that he was under
43 The Guptas and President Zuma have never acknowledged that any improper
pressure was put on Mr Koloane (or any other person) to make the Waterkloof
airbase available for the Gupta wedding. If that were the case, one would have
expected them both to have viewed the conduct of Mr Koloane in a dim light, and
to have had no further contact with him. However, they have both continued to
145Mail & Guardian Zuma fury over the Guptas wedding scandal, 3 May 2013; Mail & Guardian Free State
government gave Gupta guests an alibi, 10 May 2013; Mail & Guardian, Gupta wedding: What is the plane truth?
10 June 2013.
146 Refer to attachment MJZ 30, MJZ 31 and MJZ 32.
147JCPS Cluster Report -Landing of a chartered commercial aircraft at air force base Waterkloof:
http://www.justice.gov.za/reportfiles/other/20130517-jcps-waterkloof-report.pdf
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they had nothing to do with his unlawful acts in relation to the Waterkloof fiasco:
in August 2014.
43.2 Mr Koloane has retained strong ties to the Guptas, including facilitating
2017.148
Further emails evidence how Mr Koloane approached the Guptas in 2016 to sponsor
Saharas CEO, Ashu Chawla, who forwarded the request to Tony Gupta. The
Mr Zwane has used his position as Minister to benefit the Guptas and
Duduzane Zuma
the sale of Optimum Coal Mine from Glencore (Pty) Ltd to Tegeta (Pty) Ltd, a
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45 Following its purchase of Optimum Coal Mine, Tegeta secured lucrative coal
supply contracts with Eskom from Optimum Coal Mine. These include a R564
million contract awarded in April 2016 to supply Arnot power station with 1.2
million tons of coal over six months (excluding the transport costs also payable
May, last year, Public Enterprises Minister Lynne Brown told Parliament that
Eskom paid an average price of R230.90 a ton for coal, and that the average
R428.84 a ton.
City Press has established that, with transport, Tegeta is paid roughly R580 a
ton, pushing the total value of the six-month contract up to just under R700
million.151
46 Tegeta also inherited an estimated R1.5 billion rehabilitation trust fund, set aside
under the Mineral and Petroleum Resources Development Act and the National
Environmental Management Act to finance the rehabilitation of the mine upon its
closure.
150On the shareholdings and directorships of these companies, see Public Protectors State of Capture Report at
pp 111-112.
151 City Press, How Eskom bailed out the Guptas, 12 June 2016.
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the Guptas have received contracts worth R11.7-billion from Eskom for coal
bidding process, and the R11.7-billion does not include the contracts that Tegeta
inherited when it bought Optimum Coal, nor does it include invoices totalling
48 The City Press and AmaBhungane/ Scorpio articles are attached. 153
Zwanes flight records to confirm that Minister Zwane flew from Johannesburg to
Zurich, via Dubai, on 29 and 30 November 2015. The Public Protector reports
that she received information from an independent source that Minister Zwane
did in fact meet with Mr Glazenberg in Switzerland at the Dolder Hotel around 30
November 2015 to 5 December 2015, and that the other individuals present
50 The Public Protector was unable to explain how Minister Zwane got from Zurich
to Dubai, since his official flights (booked on Emirates Airlines (i) from Zurich to
Dubai on 2 December 2015; (ii) from Dubai to Delhi on 3 December 2015; and
(iii) from Delhi to Dubai on 5 December 2015) were never used. However,
152 AmaBhungane and Scorpio, #GuptaLeaks: How Eskom was captured, 10 June 2017.
153Refer to attachment MJZ 35.
154Public Protector, State of Capture: Report on an investigation into alleged improper and unethical conduct by
the President and other state functionaries relating to alleged improper relationships and involvement of the Gupta
family in the removal and appointment of Minister and Directors of State-Owned Enterprises resulting in improper
and possibly corrupt award of state contracts and benefits to the Gupta familys businesses (Report 6 of 2016/17),
14 October 2016 (State of Capture Report).
155 Public Protector, State of Capture, Report 6 of 2016/2017 at p 126, paras 5.110.
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Minister Zwane did catch his official flight booked from Dubai to Johannesburg
on 7 December 2015.156
51 The flight and accommodation bookings extracted from the Sahara computer
server confirm that, on 2 December 2015, when Minister Zwane failed to board
his official flight from Zurich to Dubai, he was on board the Guptas private
Bombardier jet, ZS-OAK, along with Tony Gupta and Salim Essa. Further, the
records evidence that Minister Zwane spent the next two days in India with the
Guptas before flying back to Dubai and catching his official flight back to
Johannesburg.157 Whilst in Dubai, Minister Zwane was booked into the five-star
Oberoi hotel paid for by the Guptas company, Sahara Computers, and was
Computers.158
52 In the context of the Optimum Coal dispute, Eskom as an organ of state had to
decide whether to terminate its contract with Glencore, and if so, how to procure
the coal that it had previously obtained from Glencore, it would plainly have been
improper for Minister Zwane to travel with, and at the expense of the Tegeta
delegation that was hoping to obtain the Eskom contract after forcing Glencore
to sell the Optimum mine. Minister Zwane, the Guptas and former Tegeta CEO,
Nazeem Howa, have thus persistently lied to the public by denying that this took
156
Public Protector, State of Capture, Report 6 of 2016/2017 at p 125, para 5.105-5.108.
157 AmaBhungane and Scorpio, #Guptaleaks: How Eskom was captured, 9 June 2017.
158 Refert to attachment MJZ 36.
159 Cape Times Zwane denies Swiss trip with Guptas to facilitate Optimum mine sale, 8 June 2017; Herald Live
Ajay Gupta denies Tegeta travelled with Zwane to Switzerland in a February interview, 22 November 2016; City
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has not met with any member, nor close associate of the Guptas. He has
52.2 In a written reply to parliamentary questions from the EFF leader, Mr Julius
Malema, in May 2016, Zwane denied travelling with the Guptas on their trip
52.3 In a written reply to parliamentary questions from Freedom Front Plus MP,
retrenchment. Minister Zwane also denied that he had any direct or indirect
52.4 The parliamentary questions and Minister Zwanes replies are attached.160
Press Guptas: Avoid them, IDCs urged; Zwane denies Switzerland trip, 25 May 2016; Business Day, Mining:
Ministers Gupta trip, 25 January 2016.
160 Is attached marked MJZ 37A, MJZ 37B and MJZ 38.
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53 The travel and accommodation records for Minister Zwane between 2 and 7
54 Under Minister Zwane, the Department of Mineral Resources has also approved
of Baroda accounts of
54.1 R280 million from the Koornfontein Rehabilitation Trust Fund on 23 May
2016; and
54.2 R1,469 billion from the Optimum Mine Rehabilitation Trust Fund on 21
June 2016.
release of these mine rehabilitation funds in the State of Capture report. The
It is clear and apparent that the funds were not ring-fenced for the
the investment accounts were not reinvested and recapitalised but were
161Public Protector, State of Capture, Report 6 of 2016/2017 at pp 280-291, paras 5.348 and 5.355. See also at
pp 333-337, para 6.4(oo) (ccc)
162In Minister of Finance v Oakbay Investments (Pty) Ltd and Others, High Court Gauteng Division, Pretoria, case
no. 80978/ 2016.
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of the release of funds from the Optimum Mine Rehabilitation Trust Funds
where the Standard Bank account was closed because of suspicious and
unusual transactions on the account. Mr Gordhans affidavit and the FICs report
is attached.163
interest
Mr Malcolm Mabaso.
Protectors report records that Mr Moodley served as his advisor in 2016, during
59.1 Mr Moodley is a known friend of the Gupta family and Mr Essa, the Guptas
close business associate and sole director, inter alia, of Elgasolve (which
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59.2 Mr Moodley is the sole director of Albatime (Pty) Ltd, a company that made
a R10 million payment for the benefit of Tegeta towards the acquisition of
2016, which includes at the time of the sale of Optimum Coal Mine and the
Tegeta.167
59.5 Mr Moodley also has business ties to Mr Mark Vivian Pamensky, another
165 Public Protector, State of Capture, Report 6 of 2016/2017 at p 112 para 5.42.
166Public Protector, State of Capture, Report 6 of 2016/2017 at p 124 paras 5.102 5.103 and p 275 para 5.332
5.333..
167 Public Protector, State of Capture, Report 6 of 2016/2017 at p 118 para 5.71.
168 Public Protector, State of Capture, Report 6 of 2016/2017 at p 124 para 5.102.
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has a 74% stake and Tegeta a 19.6% stake;169 Yellow Star Trading 1099,
2016.
van Rooyen, on the first day of his fleeting spell in office as Minister of
Treasury, Minister Van Rooyen also sought to ensure that Mr Mabaso was
169 The Herald Joining the dots between Eskom and the Guptas, 3 November 2016.
170 Business Day, Links in the Gupta chain, 9 March 2017.
171AmaBhungane, The Gupta-owned State enterprises, 24 March 2016; Sunday Times, How to hijack a coal
mine 1, 2, 3, 6 November 2016.
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employee.172
statement
61 Emails recovered from the Sahara computer server evidence that the Guptas
and their known associates (including Duduzane Zuma and Nazeem Howa, the
(including Minister Zwanes alleged closeness to the Gupta family, the sale of the
Perhaps I can sit with someone this side to help me polish and add to
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63 In February and March 2016, Mr Howa also exchanged a series of emails with
employees of Bell Pottinger (the UK-based, Public Relations firm hired by the
emails evidence the Guptas sustained efforts to direct public statements from
64 That Minister Zwane was discussing Cabinet business with the Guptas, and
taking instructions from them, is further supported by the fact that, in July 2016,
Bell Pottinger told Fin24 reporters that it was in possession of the findings of the
Zwane as its chairperson) to investigate the closure of the Guptas South African
and that Minister Zwane, should be directly contacted. This was two months
before Minister Zwane made these findings public on 2 September 2016.176 The
that a judicial inquiry investigate why South Africas banks had blacklisted Gupta-
174
Refer to attachments MJZ 43 and MJZ 44.
175
Fin24, Exclusive: Gupta PR firm knew about bank probe weeks before Zwane dropped the bomb, 22
September 2016.
176Business Day, Gupta PR firm knew about Zwanes banks inquiry before it was announced, 22 September
2016.
177 Refer to attachment MJZ 45.
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owned businesses. The recommendation included that the inquiry look into the
consider the current Financial Intelligence Centre Act and the Prevention of
South Africas clearing bank provisions to allow for new banking licences to be
issued; and investigate the establishment of a state bank of South Africa with
66 Minister Zwane was severely rebuked by the ANC and the Presidency, who
into the banking sector and denied that the recommendation had Cabinet
backing.179 Media reports of the statements issued by the ANC and the
misleading statement or to explain what drove him to mislead the public about
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and Others (litigation concerning the Minister of Finances powers to interfere in bank-
client relations), Nedbanks CEO, Mark Brown attests to having attended a meeting
with Minister Zwane in May 2016, as chairperson of the Inter- Ministerial Committee.
Minister Zwane was accompanied by Minister Faith Muthambi and her advisor, Mr
Mzwanele Manyi (who are not appointed as members of the committee), and not the
Minister of Finance and Minister of Labour who were its appointed members. Mark
Brown states that, at this meeting, Zwane attempted to persuade Nedbank to keep
Gupta companies as clients and to become their primary banker. The relevant portion
182 Fin24, Nedbank says mines minister urged them to keep Guptas as clients, 13 December 2016.
183 Attached marked MJZ 49and MJZ 50.
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FAITH MUTHAMBI
1 The Ministry of Communications has been of particular importance for the Gupta
family by virtue of their broadcasting interests in Infinity Media (Pty) Ltd which
owns the television station, ANN7 and which has attempted to procure a free-to-
Board Inquiry (headed by the Hon. Mr Vincent Smith MP) found that Minister
Shareholder Representative [of the SABC]. The Committee noted that the
amended the MOI to further centralise power in the minister, and condemned
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portfolio.184
5 In November 2015, the High Court found that Minister Muthambi acted irrationally
the SABC in the face of the Public Protectors damning findings against him of
abuses of power, fraud and maladministration. The court held that the
exhaustively examine all of the disputes raised about his integrity and
6 The Supreme Court of Appeal made the same (albeit prima facie) findings
against the Minister.186 It also criticised Minister Muthambi for treat[ing] with
unlawful, and for raising technical objections rather than furnishing the court with
an explanation of her actions. The Court advised both the Minister and the SABC
that the overriding public interest obliged them to make full and frank disclosure
opposition.187
184Final Report of the Ad Hoc Committee on the SABC Board Inquiry into the Fitness of the SABC Board, 24
February 2017, paras 39.1.1 and 39.1.2.
185
Democratic Alliance v South African Broadcasting Corporation Soc Ltd and Others (12497/2014) [2015]
ZAWCHC 182; [2016] 1 All SA 504 (WCC); 2016 (3) SA 468 (WCC) para 49.
186South African Broadcasting Corporation Soc Ltd and Others v Democratic Alliance and Others [2015] ZASCA
156; [2015] 4 All SA 719 (SCA); 2016 (2) SA 522 (SCA) at para 48.
187 Above at para 51.
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behind a veil of secrecy, and with evident disdain for public accountability.
8 In June 2017, in ruling on eTVs challenge to the Ministers set-top box policy,
as regards consultations that she had with undisclosed parties. Chief Justice
Mogoeng stated:
have volunteered the identities of those she consulted with and what the
9 In his most recent cabinet reshuffle President Zuma has retained Minister
10 What is more, President Zuma has appointed Minister Muthambi to lead the very
portfolio that most urgently requires leadership that is committed to the principles
188 Above at para 61. See also para 157 (of the minority judgment).
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of the Constitution.
indication that an improper relationship exists between President Zuma and the
Gupta family.
12 Media reports and the records leaked from the Guptas Sahara Companys
12.1 During the course of July and August 2014 (shortly following her
Vuyo Batyi as the Chairperson of the ICASA on condition that she grant
the Guptas ANN7 media company, Infinity Media (Pty) Ltd a free-to-air
stake in Infinity Media. When Batyi refused to comply with this condition
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committee.
Manyi as her legal and special advisors. Both have close ties to the
improper relationship with the Gupta family, and has abused her public office to
benefit the Gupta family and their business associates, including Duduzane
Zuma.
particular importance to the Gupta family and then retained her in the Cabinet in
criticisms of her conduct from Parliament and the Courts. In the context of
President Zumas broader relationship with the Gupta family, the most likely
Gupta family and their business associates, including the Presidents son,
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14.2 his retention of Minister Muthambi in the Cabinet has been to protect her
for her promotion of the interests of the Gupta family and their business
associates.
15 The remainder of this chapter details the key facts in relation to these processes,
16 The email records obtained from the Sahara computer server show that, between
July and August 2014 shortly after President Zuma appointed her to Cabinet
Tony Gupta on confidential matters of executive policy and on the scope of her
16.1 that the transfer of powers to her national portfolio in 2014 was influenced
16.2 that Minister Muthambi used her relationship with the Guptas to influence
the manner in which the President transferred powers into her portfolio.
17 These emails were either sent directly from Minister Muthambi to Tony Gupta or
Tony Gupta and Duduzane Zuma. The latter appears to have acted as a conduit
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alia that all powers under the Electronic Communications Act 36 of 2005
and the Sentech Act 63 of 1996 were to be assigned from the Minister
following statement:
policy directions are set out in section 3 of this Act. These powers
189Copies of the email of Mr Chawla forwarding the email of Minister Muthambi to Tony Gupta and the attached
proclamation are Annexed as COM 1; COM 2 & COM 3.
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who will make policy and issue policy directives to ICASA for
17.4.1 In the first e-mail, with the subject line Proclamation New July
e-mail under the file name proclamtion (sic) new 18 July 2014
(clean).docx.191
Minister of Communications.
17.4.3 In a second e-mail sent minutes later, with the subject line
190 Copies of the email of Minister Muthambi and the attached document are Annexed marked COM 4 & COM 5.
191 Copies of this email and the attached document are Annexed marked COM 6 & COM 7.
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emails.193
17.4.5 The use by Minister Muthambi of the word must in both of her
possibilities:
(a) Either she was conveying to Tony Gupta that these changes
be protected, or
(b) She was instructing Tony Gupta to use his influence with
sector to the extent that it deals in any way with a broadcasting service
192 Copies of the emails and the attached document are attached as COM 8 & COM 9.
193
Copies of the emails of Ashu Chawla to Tony Gupta and Duduzane Zuma are attached as COM 10A; COM
10B; COM 11A ; COM 11B; COM 12A; COM 12B; COM 13A & COM 13B.
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17.6.1 The first is that it proposed fixed dates for certain stages in the
17.7 As pointed out in the document that Minister Muthambi had forwarded to
policy now lay not with Minister Muthambi, but with Minister Cwele. On
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Cape Town this morning ... I hope he still on his way. Minister Muthambi
the e-mail and the document to Tony Gupta later that day. 195
17.8 Minister Cwele did not obtain Cabinet approval for his proposed final
Again, the use of the word must in the email from Minister Muthambi
195
Copies of the emails of Minister Muthambi and Mr Chawla, and the letter of Minister Muthambi to Minister
Cwele are attached as Annexure COM 14 & COM 15.
196 Copies of the email and the proposed proclamation are attached as COM 16; COM 17 & COM 18.
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reply, thanking her for the proposed proclamation that the President
correspondence.197
17.11 The draft Presidential proclamation was never promulgated in the self-
broadcasting.
17.12 With policy on Broadcast Digital Migration safely now under her control,
2015 under Government Notice 232 of 2015.198 The final policy included
17.12.1 The policy no longer tied the Government to any dates for the
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17.12.2 The policy provided that Government subsidised set top boxes
17.13 As pointed out above, when Minister Muthambi was taken to Court by e-
persons with whom she had consulted in relation to the changes that she
made. In the light of the emails described above, the reasons for this
17.14 We are unaware of what particular interests the Gupta family may or may
not have had in delaying the digital migration process or in resisting the
subsidisation of set top boxes that were capable of being used for
See the Business Day Article of 18 February 2015 Muthambi defies ANC on digital
199
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jurisdiction.
COO of the SABC, in spite of the Public Protectors findings and remedial action.
The High Court and Supreme Court of Appeal found that the Ministers decision
November 2011), and later as acting COO (November 2011-July 2014) and
promoted the SABCs so-called business relationship with the Guptas media
terms of which the SABC would broadcast the New Age Business Breakfasts
at a loss to the SABC, while TNA Media amassed considerable profits and media
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22.1 SABC producer, Mr Vuyo Mvoko gave evidence that SABC resources
indicated that the SABCs Morning Live resources were diverted to pay
for the production costs associated with the TNA Business Breakfasts.
The SABC did not generate any revenue from the briefings. 200
22.2 The former acting Group CEO of the SABC (between July 2011 to
he indicates that the shows came at a huge cost to the SABC. Technical
exclusively.201
23 In addition, the SABC paid huge subscriptions to the Gupta-owned New Age
2015/2016.202
24 During Parliaments inquiry into the SABC, Mr Molefe made a serious allegation
200 Ad hoc Committee report para 17.1.3. See also para 8.2.4.
201
Ad hoc Committee report para 17.1.3. See also para 18.1.1 on the corroborating evidence of Mr Mvoko and
Ms Gqubule-Mbeki.
Polity, DA: Phumzile van Damme says Muthambi refuses to disclose Gupta meetings, 30 November 2016.
202
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Chair, I told you that this is not our man. So Im going to Pretoria tonight. 203
This reported conversation suggests that Mr Motsoeneng was protected not only
public resources vested in the SABC to benefit the Guptas rival media
President Zuma.
Africa (ICASA) on condition that she grant the Guptas media company, Infinity
Media (Pty) Ltd a free-to-air television licence for its ANN7 channel. President
Zumas son, Duduzane Zuma also has a stake in Infinity Media, through
203 News24, Hlaudis R500k demand, Pretoria, Guptas take centre stage in SABC inquiry, 9 December 2016.
204 News24, Gupta bid cost Icasa chair her job report. 31 July 2016.
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27 The incident was reported by the Sunday Times in July 2016, after Ms Batyi
resolved to take legal action against the Minister.205 It was reported that:
Muthambi sent Batyi a letter appointing her as chairwoman for one year,
Two independent sources, one with direct knowledge of the offer, said
Muthambi told Batyi her job came with conditions and she had been
Batyi refused to approve the application, the sources said. The next day
Batyi received a second letter from Muthambi saying she could only
28 In May 2016, Minister Muthambi and her advisor, Mr Mzwanele Manyi, attended
205 Sunday Times, Minister attached Gupta strings to Icasas top job, 31 July 2016.
206 This article is attached marked COM 21.
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committee.
its Gupta-held accounts. Minister Muthambi failed to give any explanation for
her legal and special advisors. Both are reported to have close ties to the
31 Mr Mantsha acted as Minister Muthambis legal advisor during the course of 2015
and 2016, despite having been struck from the roll of attorneys in 2007 after the
High Court found that he was guilty of a range of counts of serious misconduct
and had been untruthful to his clients, the Law Society and the Court. 208
32 Shortly after being appointed by Minister Brown as Chair of Denel (on 24 July
2015), Mr Mantsha oversaw the conclusion of the Denel Asia joint venture
207 Business Day, Nedbank CEO reveals details of Gupta intervention, 13 December 2016.
208 Law Society of the Northern Provinces v Mantsha [2007] ZAGPHC 132 (25 July 2007)
209 AmaBhungane, How Denel was highjacked. 30 May 2016.
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Investments).210
33 The email records on the Sahara company server evidence direct and improper
ties between Mr Mantsha and the Guptas. The emails evidence that
33.1 Mr Mantsha was flown to India and Dubai at the expense of the Guptas on
several occasions.
Zuma). Flights were booked for all three by the Guptas travel
210 AmaBhungane, Guptas conquer state arms firm Denel, 5 February 2016.
211 The emails evidencing these facts are attached marked COM 22 & 23.
212
The emails evidencing these facts and attached records are attached marked COM 24; COM 25; COM 26;
COM 27; COM 28; COM 29 & COM 30
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Enterprises.
Guptas.214
213 The emails evidencing these facts are attached marked COM 31; COM 32 & COM 33.
214 The email is attached marked COM 34 & COM 35.
215 See COM 34.
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33.3 Mr Mantsha also sent the Guptas his personal bills. On 3 August 2015,
Mr Mantsha sent his municipal rates bill of R14 238 for his Randburg
from the Sahara computer server evidence Mr Manyis close association to the
Guptas. In particular, they reveal that Mr Manyi scouted for Guptas, sending
them the CVs of high profile persons, including his own, for vetted appointments
35.1 In May 2014, Mr Manyi sent two emails to Sahara CEO Ashu Chawla. He
attached his own CV and that of Attorney Xoliswa Mpongoshe under cover
Straight Talk.218
led the PPF in vociferously opposing the promulgation into law of the
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strengthen the FICs powers to stamp out money-laundering and the illicit
the Gupta family's various personal and business accounts, valued at R6.8
35.4 In December 2016, the Sunday Times reported how the Black Business
Zumas continued concern to appoint to this national portfolio persons who are
friendly with the Guptas and their associates, including Duduzane Zuma.
37 The records from the Sahara company server evidence that from 16 to 19
December 2015, Ms Dlodlo stayed at the luxury Oberoi Hotel in Dubai. While
Ms Dlodlos account was settled by Mr Fana Hlongwane, the Oberoi liaised with
219Minister of Finance v Oakbay Investments (Pty) Ltd and Others, High Court (North Gauteng, Pretoria) case no.
80978/2016. See also News24: Here it is: The full list of 72 dodgy Gupta transactions, 15 October 2016.
220 Sunday Times, Black Business Council snubs Guptas, 30 December 2016.
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reservation. Further, the Oberoi sent Mr Chawla the invoice that had been paid
38 At the time, Ms Dlodlo was serving as Deputy Minister of Public Service and
39 Minister Dlodlo has admitted to having a scheduled trip to Jordan diverted for her
stay in Dubai. It has since been established by the Democratic Alliance that
Minister Dlodlo failed to declare her sponsored stay in Dubai in the National
Africa, the Guptas and their associates in Infinity Media (Pty) Ltd which include
Communications.
221 These records are attached marked COM 42; COM 43; COM 44 & COM 45.
Mr Hlongwane is mentioned in the Public Protectors report, State of Capture, Report 6 of 2016/2017, 14 October
222
2016. The report records in para 5.27, p 107 that Mr Hlongwane considers himself to be an uncle to Duduzane
Zuma, and is a casual acquaintance of members of the Gupta family.
223 Sunday Times Communications Minister Ayanda Dlodlo failed to declare her trip to Dubai, 7 June 2017.
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MINISTERS
seen above, the Guptas have received billions of rands in contracts linked to
State Owned Enterprises. They have also been denied banking facilities by
South African banks as a result of suspicions that their bank accounts are being
used for money laundering. The Guptas accordingly have an obvious interest in
influencing the Minister of Finance and in removing from that position anyone
2 President Zuma has changed Finance Ministers four times during his terms in
office. This is the most number of changes to the post under one President since
3 During October 2015 the Deputy Finance Minister, Mcebisi Jonas was invited to
ultimately held on 23 October 2015 at the Rosebank Hyatt. An hour into the
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where Jonas met with one of the Gupta brothers, whose name he does not
recall.224
4 At this meeting, the Gupta brother offered Mr Jonas the position of Minister of
Finance in exchange for R600 000.00 immediately and the promise of more
money later. Mr Jonas declined the offer and left the meeting. After this meeting,
he warned the incumbent Finance Minister, Mr Nhlanhla Nene, that his position
was in danger.
5 On 9 December 2015, the President removed Mr Nene from the office of Minister
of Finance and replaced him with David van Rooyen. Mr Van Rooyen had no
Rooyen was, however, closely connected to the Gupta Family. The true extent
of his connection was revealed in the Public Protectors report entitled State of
5.2 the night before Nenes dismissal, Mr Van Rooyen made several
224Jonas Answering Affidavit in Minister of Finance v Oakbay and Others, Case no. 80978/2016, pp6-8, paras
12-16 - Annexure NAT 1
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6 On Mr Van Rooyens first day he arrived with two advisors, Mr Mohamad Bobat
and Mr Ian Whitley. Both of these men were closely connected to Gupta family
finally.
Minister of Finance leads unavoidably to the conclusion that his decisions in this
regard have been influenced by the interests of the Gupta family and his son
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record. This episode presents the starkest example of the abuse of the
13 The starting point is the Guptas offer of the post to Mr Jonas. Mr Jonas has
described these events on three separate occasions and his version of events
Duduzane Zuma, Mr Jonas was already aware of his close ties with the
13.2 On 23 October 2015, Mr Jonas met Duduzane Zuma at the Hyatt Regency
225 Jonas first released a public statement, a copy of which can be found on the following website:
http://www.treasury.gov.za/comm_media/press/2016/2016031601%20-
%20Statement%20by%20Deputy%20Minister%20Jonas.pdf. Jonas also gave evidence to the Public Protector
in her State of Capture Report, which version is recorded in that report at pp 91-94, para 5.17. Finally, Jonas
defended his version in an affidavit filed in the North Gauteng High Court in Minister of Finance v Oakbay and
Others, Case no: 80978/16.
226 State of Capture report, pp100-103, para 5.23
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Zumas vehicle, the pair drove to the Gupta family residence in Saxonwold.
13.3 When they arrived, they were met by Ajay Gupta along with Mr
Zuma.
13.4 Despite this, Ajay Gupta advised Jonas that they were going to make him
Minister of Finance.
13.5 Mr Jonas reacted with shock and irritation. He declined the offer, informing
Ajay Gupta that only the President of the Republic was empowered to
make such decisions. Mr Jonas stood up and left the meeting. As he was
account of his choosing and whatever amount of cash he could carry with
him.
13.6 Ajay Gupta also mentioned the names of persons with whom they were
working. He informed Mr Jonas that they (the Gupta family) made lots of
money from the State. They wanted to make more money, but Treasury
13.7 Duduzane Zuma and Mr Hlongwane remained silent during this meeting.
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13.8 Shortly after this incident, Mr Jonas informed both Minister Nene and Mr
the President stated that he would be deployed to the African Regional Centre
15 Later that evening, the President announced his decision in a media statement.
The primary reason the President cited for Mr Nenes dismissal, was that Nene
16.1 Mr Nene never was appointed to the post of Director General of the BRICS
16.2 There is no evidence to suggest that any decision by BRICS partners had
been taken to offer the post of Director General of the BRICS Bank Africa
Centre.
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16.3 The suggested appointment had not been canvassed with Mr Nene. So
there was no basis upon which to assume that he would take the
16.4 On the Presidents own version, Minister Nene had ...done well since his
office with a view to deploying him at the BRICS Bank without first
Bank.
is most unlikely that this would not have been canvassed fully with Mr
Nene in advance.
17 It is much more likely that Minister Nene was removed because he had taken
17.1 Minister Nene opposed the Nuclear Build Programme on the basis that it
was fiscally irresponsible. During the cabinet meeting that preceded his
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Given their interests in Shiva Uranium, the Guptas had an obvious interest
in the Nuclear Build Programme. Gupta companies hold the entire issued
shareholding of Shiva Uranium and the three Gupta brothers are all
17.2 Minister Nene had also clashed with Ms Dudu Myeni, the Chairperson of
18 The decision to remove Minister Nene was ill-considered. The impact on South
Africas economy was devastating. The JSE All-Share index lost R169 Billion in
the wake of the Presidents announcement. The currency fell to an all-time low
19 Mr Van Rooyens cellular phone records place him in the vicinity of the Guptas
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explanation from Minister van Rooyen, it has to be assumed that he was meeting
because his friend, Mr Gaddafi Rabotapi, claimed to have known about this
decision. So too did Van Rooyens brother, as was pointed out by Mr Trevor
Manuel in an open letter to Minister Lindiwe Zulu.234 Despite this, the President
apparent from the Cabinet Statement from that same day, which did not mention
this development.235
On the first day, he arrived with two advisors, Messrs Ian Whitley and Mohamed
Bobat.
22 The Guptas business associate Mr Eric Wood knew as early as 26 October 2015
that Mr Nene was going to be fired and that Mr Bobat would be appointed advisor
informed by Mr Wood, to whom she then reported at Regiments Capital, that the
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President would replace Minister Nene and that Mr Bobat would be appointed as
an advisor to the new Minister. Mr Bobat was then expected to channel tenders
Trillian Capital.236
Africa in the wake of the dismissal of Minister Nene.237 As appears from the
email chain under which it was forwarded,238 the document was produced in
response to a request for all Directors General to address six topics in advance
2 and 3 were issues of particular significance to the Guptas: the state of SoEs
and corruption and perceptions. Points 4 and 6 would also be of special interest
to the Guptas: beneficiation and mining and 9 point plan and each departments
contribution.
25 Within three minutes of receiving the document from Mr Whitley, Mr Bobat had
236 http://www.fin24.com/Economy/gupta-linked-firm-knew-of-nenegate-months-in-advance-report-20161023
237 Annexure NAT 5 (The presentation)
238 Annexure NAT 6 (The email chain)
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address. As we point out in Chapter 3, this address has repeatedly been used
26 Minister Van Rooyen remained in the post for approximately four days. On 13
December 2015, the President replaced Minister Van Rooyen with Gordhan as
President said he had taken representations, which led him to change his
mind.239
27 Following Minister Van Rooyens removal from the Ministry of Finance, the Gupta
family appear to have treated him to a consolation trip to Dubai. Emails obtained
from the Sahara company server show that, on 20 December 2015, the Guptas
booked and paid for Minister van Rooyens stay at the luxury Oberoi Hotel and
28 President Zuma appointed Minister Gordhan to take the place of Minister van
Rooyen, when the response to Minister van Rooyens appointment made clear
that it was necessary to replace him with someone who could be trusted to
29 Minister Gordhans attempts to stabilise the economy brought him into regular
conflict with the Guptas as government officials under the authority of Minister
239 http://www.thepresidency.gov.za/content/announcement-new-ministers-finance-and-cogta
240 See annexure NAT 7.
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Gordhan took responsible decisions which conflicted with the interests of the
29.1 His refusal to sanction the Denel / VR Laser joint venture which is
29.2 The Treasurys robust investigation of the Eskom / Tegeta coal contracts
Eskom.242
delivers to Eskom.
241 See for example Annexure NAT 8 (IOL article of 13 April 2016 attached Gordhan lashes Denel over Gupta
linked firm)
242 See Annexure NAT 9 (Treasury statement attached 2016082901 - Statement on Eskom Contracts)
243 http://www.news24.com/SouthAfrica/News/treasury-blocks-r4bn-gupta-deals-20170423-3
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29.4 The failure of the Minister and the Registrar of Banks to fast-track the
the shares in Habib Overseas Bank Limited and thus to enable the Guptas
this application was the failure of Vardospan Limited to prove that it had
Resources (Pty) Ltd, Trillian Capital Partners (Pty) Ltd and VR Laser
244The facts in this regard were set out in the Answering Affidavit of the Minister in the urgent application that
Vardospan Limited unsuccessfully brought against the Registrar Minister Gordhan and others in the North
Gauteng High Court under case number 21622/2017. A copy of that affidavit is Annexure NAT 10.
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of Baroda.245
29.5.4 This transaction presented the real risk that the R1.3 billion, which
30 The issue of sharpest conflict between Minister Gordhan and the Gupta family
concerned the closure of Gupta linked accounts by various South African banks.
This episode also illustrates the extent to which the Gupta family was able to
enlist the support of President Zuma, Minister Zwane and Minister Muthambi to
31 During April 2016, Oakbay announced that its bank accounts had been closed
by the South African banks with which it held bank accounts and which were
intervention to reverse this decision. In this letter, Oakbays CEO stated that the
245 Gordhan FA in Minister of Finance v Oakbay and Others, Case no.: 80978/2016, paras 27-28.
246 Para 7, Gordhan FA, Minister of Finance v Oakbay and Others
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Standard Bank decided to close our business accounts. ... As the CEO I now
hope to draw a line under the corporate bullying and anti-competitive practices
Cabinet decided to intervene in the dispute between the banks and the Guptas.
Cabinet noted the actions by the four banks that gave notice to close
the bank account of a company. Whilst Cabinet appreciate the terms and
conditions of the banks, the acts may deter future potential investors who
may want to do business in South Africa. Cabinet has endorsed that the
matter.248
committee (IMC) to investigate allegations that the closure of the Gupta family
accounts was done unilaterally and in collusion. This IMC was led by Minister
above.
247 Gordhan FA in Minister of Finance v Oakbay and Others, Case no.: 80978/2016, para 9
248 Statement on Cabinet Meeting on 13 April 2016, para 5.2. Obtainable from
http://www.gcis.gov.za/newsroom/media-releases/statement-cabinet-meeting-13-april-2016
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35 Over the coming months, the IMC conducted meetings with the heads of the
major banks. Some banks declined to take part in the IMC, as it was not properly
that he left the meeting with the distinct impression that the purpose of cabinets
intervention was (i) to determine whether there was collusion; and (ii) to ask
36.1 For no apparent reason, Minister Muthambi, a close ally of the Guptas,
37 While the IMC had been pursuing its business, the Guptas continued to deal
his assistance.250
could intervene. Minister Gordhan was advised that neither he, nor any
249 See the affidavit of Mr Brown which is attached as Annexure NAT 11.
250 Gordhan FA in Minister of Finance v Oakbay and Others, Case no.: 80978/2016, para 11
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was further advised that required KYC policies and practices "not only
unlawful activities.
law by the FICA. In addition, the Banks Act imposes reporting duties,
251 Gordhan FA in Minister of Finance v Oakbay and Others, Case no.: 80978/2016, para 13
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communicated the contents of the opinion with them. Minister Gordhan went so
40 On the same day, Oakbay sent a letter to Minister Gordhan indicating that its
own legal advice was that any legal approach by it to challenge the closure of its
41 Despite this, Oakbay and Sahara continued to insist both publicly and to the
Minister, that the Minister was indeed endowed with the power to intervene in
such matters. In this context, Minister Gordhan applied to the North Gauteng
High Court in November 2016 seeking a declaration, that he could not intervene
in the dispute.
42 Minister Gordhans application was heard in the week of 27 March 2017. In the
same week, the application of Vardospan Limited to compel the Minister to allow
it to take over Habib Overseas Bank Limited was heard in the High Court. While
both applications were being argued in court, Minister Gordhan was recalled from
252 Gordhan FA in Minister of Finance v Oakbay and Others, Case no.: 80978/2016, para 16
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43 President Zuma replaced Minister Gordhan with Minister Gigaba on the night of
31 March / 1 April 2017. In order to inform him of his removal, President Zuma
Gordhan was attempting to reassure investors that the South African economy
was an appropriate destination for their money. Within days of the recall of
Minister Gordhan, the sovereign credit rating of South Africa had predictably
44 Minister Gigaba is not in the same category as Ministers Zwane and Muthambi
allies to the Board of Transnet where they presided over transactions that
members.253
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45.1 the clear influence that the Gupta family exercised in relation to the
45.2 the sustained conflict between Minister Gordhan and the Gupta family,
45.4 the inevitable damage that the removal of Minister Gordhan would do to
45.5 the appearance that his successor Minister Gigaba is a more Gupta
friendly Minister,
the inference is inescapable that the interests of the Gupta family influenced the
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CHAPTER 7: CONCLUSION
1 As the Head of State and the Head of the national Executive, the President
Only upon him has the Constitutional obligation to uphold, defend and
peace, stability and devotion to the well-being of the Republic and all of its
and prosperity he must fight. To him is the executive authority of the entire
approval to all national legislation. And almost all the key role players in
the realisation of our Constitutional vision and the aspirations of all our
Unsurprisingly, the nation pins its hopes on him to steer the country in the
right direction and accelerate our journey towards a peaceful, just and
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2 Special obligations are attendant on being entrusted with the highest office in the
country and with the public power and resources associated with the Presidents
and maintain the Constitution and all other law of the Republic; to promote all
that will advance the Republic, and oppose all that may harm it; to protect and
promote the rights of all South Africans; to do justice to all and to devote himself
to the well-being of the Republic and all of its people. This he is required to do
with all his strength, all his talents and to the best of his knowledge and abilities
4 The President and his Cabinet and Deputy Ministers are responsible for the
proper exercise of the powers and carrying out of the functions that Parliament
assigns to the Executive and must act in line with the Constitution.257 They must
legislation. They are expressly enjoined under section 96 of the Constitution not
to
256
Section 87 of the Constitution, read with the oath or affirmation of office in Schedule 2 of the
Constitution.
257 Sections 92(2), 92(3) and 93(2) of the Constitution.
258 Section 237 of the Constitution.
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(b) act in any way that is inconsistent with their office, or expose
are entitled to hold the President to his oath of office and the obligations imposed
on him and his Cabinet by the Constitution. In its recent Secret Ballot
and the rest of Cabinet and hold them accountable for the use of State
power and the resources entrusted to them. And sight must never be
without delay. When all the regular checks and balances seem to be
occurred, then the citizens best interests could at times demand a resort
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best interests.261
governance. It is a check against the abuse of the public power and resources
that are vested in the highest office-holder in the land, the President. It is, as the
Constitutional Court has said: about ensuring that our Constitutional project is
well managed; is not imperilled; the best interests of the nation enjoy priority in
whatever important step is taken; and our nation is governed only by those
ensuring that the needs of the people of South Africa are not neglected by the
7 It falls to the National Assembly to restore public trust and confidence in the
government of the Republic of South Africa and its Constitution. It falls to each
261United Democratic Movement v The Speaker of the National Assembly and Others (CCT89/17)
[2017] ZACC 21 (22 June 2017) (UDM v The Speaker) at para 10, with reference to sections 89, 102
and 237 of the Constitution.
262 UDM v The Speaker at para 47.
263
Section 48 of the Constitution, read with the oath or affirmation of office in Schedule 2 of the
Constitution. See also UDM v The Speaker at para 79.
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8 In voting with their conscience, the members must reaffirm the principles that
drove the struggle of the oppressed majority of South Africans for so long:
hina (power belongs to us) and mayibuye iAfrika (restore Africa and its
wealth).264
9 The facts detailed in this report evidence the serious and flagrant breach by the
9.1 The President has paralysed the Criminal Justice System to protect
9.2 In relation to Nkandla, he has enriched himself at the expense of the public
9.3 He has repeatedly lied to Parliament about his conduct that has been
9.4 He has turned a blind eye to the gross violation of the fundamental rights
9.5 After being involved in a generally corrupt relationship with Schabir Shaik,
9.6 Now it emerges that he has colluded in the plundering of the South African
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State for the benefit of the Gupta family and their business associates,
unconstitutional fight or flight instincts. While his son and the Guptas explore the
functions which the Constitution reserves for the SAPS and the SANDF.265
11 The forthcoming vote of no confidence affords the National Assembly and its
face of a President who has repeatedly violated the Constitution. Prior to the
Gupta emails, the case for removing President Zuma was overwhelming. Since
and its members would be failing in their Constitutional obligation if they did not
265 Section 199 and section 205 of the Constitution of the Republic of South Africa, 1996.
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